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Consider the following information for a monopoly firm. Assume that Q equals the level of output and all costs are economic costs.
Total Revenue = 240Q - 0.5(Q squared)
Marginal Revenue = 240 - Q
Total cost = 1,000 + 40Q + 0.5(Q squared)
Marginal cost = 40 + Q
Under these conditions the firm should produce an output of:
A. Zero (shutdown)
B. 40
C. 100
D. 200
Assume her estimated selling price is lower than originally projected. How much revenue would she need in order to earn a positive accounting profits.
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