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A competitive firm has the short-run production function given by Q = 4L2 - 0.08L3 Assume the firm's fixed cost is $15,000, the labor cost (wage and benefits) is $70 per unit, and the price of the good in the market is $20.
(a) What is the firm's profit maximizing level of output?
(b) What is the firm's level of employment and its profit?
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Suppose that a firm sells in a competitive market at a fixed price of $12 per unit. The firm's cost function is: C = 200 + 4Q. Determine the minimum quantity at which the can break even. Are there multiple break even points? Explain in detail.
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