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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?
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Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..
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