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Given a perfectly competitive firm in the output market where: P0 = exogenous price, C(Q) = cost function where: C' > 0, C'' > 0.

(a) State the firm's profit function in terms of Q.

(b) Find the F.O.C. that maximizes profits at Q*.

(d) Find the S.O.C. that maximizes profits at Q*.

(e) Interpret the S.O.C.

(f) Find dQ*/dP0 using the implicit function rule on the F.O.C.

(g) Interpret the derivative in (f) economically.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9472642

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