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Consider a firm that sells a single product, wants to maximize profits, and faces a linear, downward sloping demand curve. Marginal cost is equal to

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Consider a firm that sells a single product, wants to maximize profits, and faces a linear, downward sloping demand curve. Marginal cost is equal to zero. If the firm is setting its output level and price where demand elasticity is equal to -0.5, which of the following statements is true? 0 The firm is maximizing profit and should change nothing. 0 The firm is not maximizing profit and should increase output. 0 The firm is not maximizing profit and should decrease output. 0 The firm is not maximizing profit and should lower price. 0 None of the above

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