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Assume that the short-run cost and demand data given in the tables below confront a monopolistic competitor selling a given product and engaged in a

Assume that the short-run cost and demand data given in the tables below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion.

Cost Data Demand Data
Total Output Total Cost Quantity Demanded Price
0 $25 0 $60
1 40 1 55
2 45 2 50
3 55 3 45
4 70 4 40
5 90 5 35
6 115 6 30

What output and price levels will maximize the firm's profit in the short run?

Multiple Choice

  • 3 units and $45
  • 5 units and $35
  • 4 units and $40
  • 6 units and $30

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