Firm sells output in a perfectly competitive market

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The cost function for a firm is given by TC = 6,000 + 12.5Q. The firm sells output in a perfectly competitive market and other firms in the industry sell at a price of P = 25 - 0.5Q.

(i) What level of output should be produced to maximize profits?

(ii) The firms have colluded to form one firm, what is the profit maximizing price?

Reference no: EM13956485

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