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A toy manufacturer keeps a small inventory of miniature motors it uses to build toy cars. The manufacturer learns that the price of these same
A toy manufacturer keeps a small inventory of miniature motors it uses to build toy
cars. The manufacturer learns that the price of these same miniature motors has just
increased dramatically, so if he chose to, he could now resell these at a price far above
the price that was originally paid for those in inventory. If this firm is a profitmaximizer
and the market for its toy cars is competitive, the owner should choose to
produce a quantity of toy cars, q, where the market price for toy cars
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