Its estimated inverse demand function in that market is given byp = 180 – 3q. To enter the market, the firm must invest $500in machines and tools. The variable cost of production is given by 15q2. Suppose that the capital cost (machines and tools) is not fully sunk but can be sold at some priceM.What should be the minimum value ofM for which the firm will decide to shut down? (How to determine the M?)
