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(solution) Consider again exercise 9.8. If Dan’s avoidable fixed cost increases from $10 to $22.50, how will...


Consider again exercise 9.8. If Dan’s avoidable fixed cost increases from $10 to $22.50, how will his supply function change? Exercise 9.8 Suppose Dan’s cost of making pizzas is C(Q) = 4Q + (Q2/40), and his marginal cost is MC = 4 + (Q/20). Dan is a price taker. What is Dan’s supply function? What if Dan has an avoidable fixed cost of $10?

 


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