5 simple questions, heres an example: A competitive firm has a marginal cost of producing output q given by MC(q) = 3 + 2q. The market price of the product is $9. a. What level of output will the firm produce? b. What is the firmâ€™s producer surplus? c. The average variable cost of the firm is AV C(q) = 3+q Suppose that the firmâ€™s fixed costs are known to be $3. Will the firm be earning a positive, negative, or zero profit in the short run?
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