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Suppose that the price of a service sold in a perfectly competitive market is $25 per unit. For a firm in this market, the output level corresponding to a marginal cost of $25 per unit is 2,000 units. Average variable costs at this output level equal $15 per unit, and average fixed costs equal $5 per unit. What is the firm's profit-maximizing (or lossminimizing) output level? What is the amount of its economic profits (or losses) at this output level?
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