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Firm D operates in a perfectly competitive market.The price of its product is $20 per unit. Its short-run total cost function is the following: TC

Firm D operates in a perfectly competitive market.The price of its product is $20 per unit. Its short-run total cost function is the following:

TC = 5,000 + 10Q

  1. What is Firm D's break-even quantity?
  2. Firm D's profit is $20,000.How many units did it sell to earn this profit?
  3. What is the firm's degree of operating leverage (DOL) at this level of sales?
  4. Suppose Firm D's sales increased by 10% from the number of units you computed in 2.b., above.What would be the amount of its profit?

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