Assume the equation below correspond to a profit-maximising, perfectly competitive firm. Use these equations to answer questions 5.1 to 5.4
TC= R350 if q = 0
TC= 500+ 10q + 4q2if q>0
MC= 100 + 8q if q>0
AVC=10+4q
5.1 If the firm is currently producing 20 units of output, then what are the firm's greatest possible profits?
5.2 Assume all you know is that this profit-maximising firm has an average variable cost of R50. Based on what you know about a firm like this in terms of how the firm behaves, what must be the firm's current profit?
5.3 If the market price is currently R106 (i.e P=106), then what would be the firm's greatest possible profits?
5.4 If the market price falls to R50 (i.e P=50), then what would be the firm's greatest possible profits
