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Suppose a firm faces demand curve q = 45 - p and has cost function C= 10 + 15q. We can rewrite demand as p
Suppose a firm faces demand curve q = 45 - p and has cost function C= 10 + 15q. We can rewrite demand as p = 45 - q and can determine revenue by writing R = pq = (45-q)q. We can determine MR and MC and find that a) the profit-maximizing quantity is 15. b) the profit-maximizing quantity is 30. c) the profit-maximizing quantity cannot be determined. d) maximum profit occurs where average cost is minimized. e) none of the above
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