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Problem: A firm in the perfectly competitive lobster industry has a Total Cost Function C(Q) = 0.2Q2 - 5Q + 30.
Required:
Question 1: If the firm faces a price of $10, what quantity should it sell?
Question 2: Does the firm make a profit or a loss? Calculate the amount.
Question 3: Given your answer part b, draw two graphs below: one of the lobster market, and one of a lobster firm that shows what will happen to the price of lobsters in the long run.
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