The following graph shows the cost curves of a perfectly competitive firm. a. If the market price
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a. If the market price is $6 per unit, what is the approximate quantity of output the firm will produce?
b. At a market price of $6, is the firm€™s economic profit positive or negative? Explain your answer.
c. Consider the three points, A, B, and C marked on the graph. At which point will economic profit be zero?
d. Suppose the market demand for this good decline substantially and the price falls to $2 per unit. Should the firm continue to operate or should it exit the market?
e. How would the cost curves change if the total fixed cost of production for this firm increased?
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