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A firm produces a product in a competitive industry and has a total cost function of: . At the given market price of $20, the

A firm produces a product in a competitive industry and has a total cost function of: . At the given market price of $20, the firm is producing 5 units of output.

a) Is the firm maximizing profits? Explain carefully.

b) What quantity of output should the firm produce in the long-run?

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