Long-run Firm Supply. The Boston retail market for unleaded gasoline is fiercely price competitive. Consider the situation faced by a typical gasoline retailer when the local market price for unleaded gasoline is $1.80 per gallon and total cost (TC) and marginal cost (MC) relations are:

and Q is gallons of gasoline. Total costs include a normal profit.

Question

Long-run Firm Supply. The Boston retail market for unleaded gasoline is fiercely price competitive. Consider the situation faced by a typical gasoline retailer when the local market price for unleaded gasoline is $1.80 per gallon and total cost (TC) and marginal cost (MC) relations are:
 
and Q is gallons of gasoline. Total costs include a normal profit.

Quizplus · Accepted Answer

The Answer of Long-run Firm Supply. The Boston retail market for unleaded gasoline is fiercely price competitive. Consider the situation faced by a typical gasoline retailer when the local market price for unleaded gasoline is $1.80 per gallon and total cost (TC) and marginal cost (MC) relations are:
 
and Q is gallons of gasoline. Total costs include a normal profit.

Long-Run Firm Supply