(Answered) A competitive firm estimates its average variable cost

Economics

A competitive firm estimates its average variable cost function to be

AVC = 125 - 0.21Q + 0.0007Q2 .

The firm's total fixed cost is $3,500.)

-At what level of output does the AVC reach its minimum? What is the AVC at this output level?

-Suppose the price of the product is P = $125. Determine the profit maximizing level of output? Compute the firm's profit. If the firm is losing money, should it produce? Explain.

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Microeconomics, Economics

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