Answer to Question #75198 in Microeconomics for mesh
a)determine the break even point in terms of cost and quantity
b) determine the level output that will maximize profits
a) the break even point in terms of cost and quantity is FC/(P - AVC) = 30/(49 - 2x - 2) = 30/(47 - 2x).
b) the level output that will maximize profits is at MR = MC = P.
MC = AVC = 2, so:
49 - 2x = 2,
x = 23.5 units.
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