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A firm sells its product in a competitive market where all firms charge a price of USD 4000 per unit. The firm's total costs are given as below: C(Q) = 200 + 10Q + Q2
a. How much output should the firm produce in order to maximize profit?
b. What is the difference between production (and cost) in the short-run and the long-run?
c. In what sense competitive market is an ideal market structure?
What is the discounted payback period for these cash flows if the initial cost is 15,000? What if the initial cost is $12,000? What if the cost is $16,000?
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