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Producing newsprint in a perfectly competitive industry

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Reference no: EM131163616

Suppose ABC Corp. is a firm producing newsprint in a perfectly competitive industry. We have the following information about the firm's production:

  • output (Q) = 1500 tonnes per month
  • average total cost (ATC) = $627 per tonne
  • average variable cost (AVC) = $614 per tonne
  • marginal revenue (MR) = $620 per tonne
  • marginal cost (MC) = $620 per tonne

At the current level of output, this firm is ________ profit and is earning economic profit of________ per month.

A) not maximizing; -$9000

B) maximizing; $10 500

C) not maximizing; -$10 500

D) maximizing; -$10 500

E) maximizing; $9000

Reference no: EM131163616

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