Firm has total fixed costs and constant marginal cost

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Reference no: EM13987051

A monopolistically competitive firm faces the following demand curve for its product:

Price ($) 10 9 8 7 6 5 4 3 2 1

Quantity 2 4 6 9 10 12 14 16 18 20 22.

The firm has total fixed costs of $20 and a constant marginal cost of $5 per unit. The firm will

a. produce two units; firms will exit the market in the long run.

b. produce four units; firms will exit the market in the long run.

c. produce six units; firms will exit the market in the long run.

d. produce eight units; firms will enter the market in the long run.

e. produce twelve units; firms will enter the market in the long run.

Reference no: EM13987051

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