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Suppose that your firm is a price taker and you know that marginal cost is $5 per additional unit of output, while your firm's marginal
Suppose that your firm is a price taker and you know that marginal cost is $5 per additional unit of output, while your firm's marginal revenue is $4.50 per unit. (a) Explain what your firm should do if its average variable cost is $4.25 per unit. (b) Explain what your firm should do if its average variable cost is $4.75.
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