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You are the manager of a monopolistically competitive firm. The present demand curve you face is P=100-4Q. Your cost function is C(Q) = 50+8.5Q^2.
What level of output should you choose to maximize profits?
MR= MC Q=?
How do you solve this problem? If you can solve it, can you show the calculations?
How much of each good does each consumer demand in equilibrium and what is the marginal rate of substitution for consumer A at the competitive equilibrium?
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