Consider a firm that operates in the perfectly competitive salmon farming industry. The short-run total cost curve is TC(Q)=400+2Q+0.5Q^2,whereQ is the number of salmon harvested per month.
- What is the equation for the average variable cost (AVC)?
- Solve for the firm's operation condition, MC?AVC
- Assuming MC?AVC, what is the firm's short-run supply curve? Find the supply function, NOT the inverse supply function.
- In light of the answer in part 2, What is the minimum price at which the firm operates?