Derive and graph firm’s short-run and long-run supply curves/ Managerial Economics
The total and marginal cost of producing Product A are TC = $1,000 + 2Q2: MC = 4Q
The $1,000 is a fixed cost in the short run, but can be avoided in the long run by shutting down (going out of business). There is only one possible plant size for this operation; thus SRMC = LRMC = 4Q in this problem. Derive and graph the firm’s short-run and long-run supply curves (on separate graphs).
