(Solution) - a As in Problem 4 demand continues to be given -(2025 Original AI-Free Solution)

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a. As in Problem 4, demand continues to be given by P = 120, but the firm?s cost equation is linear: C = 420 + 60Q. Graph the firm?s revenue and cost curves. At what quantity does the firm break even, that is, earn exactly a zero profit?
b. In general, suppose the firm faces the fixed price P and has cost equation C = F + cQ, where F denotes the firm?s fixed cost and c is its marginal cost per unit. Write down a formula for the firm?s profit. Set this expression equal to zero and solve for the firm?s break-even quantity (in terms of P, F, and c). Give an intuitive explanation for this break-even equation.
c. In this case, what difficulty arises in trying to apply the MR = MC rule to maximize profit? By applying the logic of marginal analysis, state the modified rule applicable to this case.