Need help with managerial economics homework

Posted on 2014-04-01 11:31:00 in Economics by R

The problem is:



The production manager of a clothing manufacturer estimates that the daily total cost of producing men's suits is given by the equation: C = 2,000 + 396 Q - 0.8Q². The market price of suits is $300. Should the firm shut down? Explain.



I'm not really sure if I started this right, but here is what I have so far:



TVC = 2,000 + 396 Q - 0.8Q²



AVC = 396 - 0.8Q



MC = 396 - 1.6Q



300 = 396 - 1.6Q



Q = 60



If someone could explain how you're suppose to solve this problem I would really appreciate it. Thanks.

---

Answer Comment

No Answers Posted Yet.