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Perfectly Competitive Firm Supply
Mankato Paper, Inc., produces uncoated paper used in a wide variety of industrial applications. Newsprint, a major product, is sold in a perfectly competitive market. The following relation exists between the firm's newsprint output and total production costs:
Total Output (tons)
Total Cost (per ton)
0
$25
1
75
2
135
3
205
4
285
5
375
6
475
7
600
A. Construct a table showing Mankato's marginal cost of newsprint production.
B. What is the minimum price necessary for Mankato to supply one ton of newsprint?
C. How much newsprint would Mankato supply at industry prices of $75 and $100 per ton?
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