Find the firm profit maximizing quantity

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Reference no: EM132428659

Suppose that a perfectly competitive firm has the following total variable cost (TVC):

Quantity: 0 1 2 3 4 5 6

TVC: $0       $6      $11     $15     $18     $22     $28

It also has fixed costs of $6. If the market price is $5 per unit:

a. Find the firm's profit maximizing quantity using the marginal revenue and marginal cost approach.

b. Check your result by re-solving the problem using the total revenue and total cost approach. Is the firm earning a positive profit, suffering a loss, or breaking even?

Reference no: EM132428659

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