9.7. A producer operating in a perfectly competitive market has chosen his output level to maximize profit.

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9.7. A producer operating in a perfectly competitive market has chosen his output level to maximize profit. At that output, his revenue and costs are as follows:

Revenue $200 Variable costs $120 Sunk fixed costs $60 Nonsunk fixed costs $40 Calculate his producer surplus and his profits. Which (if either) of these should he use to determine whether he should exit the market in the short run? Briefly explain.

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Microeconomics

ISBN: 9780470563588

4th Edition

Authors: David Besanko, Ronald Braeutigam

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