(Answered) 1 suppose that the demand curve is p 9

Management Studies

1. Suppose that the demand curve is P = 9 - Q and the costs of production are C = q2 + 9. The marginal cost function is MC = 2q.

(a) What are the second-best-where P = AC and the market clears-price and output?

(b) Could an entrant profitability enter by undercutting the incumbent? How?

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