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A Price-taking firm's variable cost function is VC = Q 3 , where Q is its output per week. It has a sunk fixed cost
A Price-taking firm's variable cost function is VC = Q3, where Q is its output per week. It has a sunk fixed cost of $3,000 per week. Its marginal cost is MC = 3Q2.
1. What is its profit-maximizing output when the price is P = $243?
2. What if the fixed cost is avoidable?
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