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Q. suppose that in a competitive market the equilibrium price is $2.50 What is marginal revenue for the last unit sold by the typical firm in this market?
Q. Suppose the short-run marginal and average variable cost curves for a perfectly competitive firm are given byMC = 20 + 40QAVC = 20 + 20Q
a. Explain how many units of output will the firm produce at a price of $100 per unit? Elucidate how you arrived at your answer and be sure to show all your calculations.
b. At what level of total fixed costs will this firm earn zero economic profit?
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