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Suppose you manage a perfectly competitive firm. Your short-run total cost is given by the following: TC=200+2q2, where q is the quantity produced by your firm. Given this total cost, the firm's short-run marginal cost is given by: MC=4q
A. If the market price fo your is $100, how many units do you recommend your firm produce in order to maximize profit? What will be the firm's profit at this quantity?
B. What is the minimum market price, below which the firm should shut down production in the short-run?
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