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Let's say that you know the following information for an oligopoly firm:
Total Revenue equals $200 million.
Variable Costs are $170 million.
Fixed Costs equal $20 million.
The firm is currently producing 2,000 products at the MC = MR point (and the MC curve is rising).
What recommendation do you have for this firm?
Refer to Example. Would the pump recommendation change if the cost of electricity was $0.15 per kWh? What if the pumps were only required for 3,000 operating.
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