Suppose that the firm has a cost function of the form C(q) = q3 − 3q2 + 4q + 1

| November 24, 2016

Please please please help me with this question about microeconomics… I have been struggling for about 3 hours…

It looks like two questions but it’s actually one…

Suppose that the firm has a cost function of the form

C(q) = q3 − 3q2 + 4q + 1

a) What is the supply curve of the firm?

b) Plot the marginal cost curve and the average cost curve

c) What is the surplus for a price of p = 10?

Now suppose the firm has a production function of the form

f(k, l, m) = (klm)^(1/4) and faces input prices (1, 2, 8) for (k, l, m) respectively.

d) What is the firm’s cost function? What is their supply function? How muchcapital k does the firm use to produce q = 4?

e) Now suppose that the firm’s capital is fixed at k = 16? What is the firm’sshort-run average cost function?

f) What is the short-run cost function when k = 40?

Thank you very much!!

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