A Perfectly Competitive Firm Has a Random Marginal Cost with a 50

question 144

Multiple Choice

A perfectly competitive firm has a random marginal cost with a 50 percent chance of a high marginal cost of $10, a 30 percent chance of a marginal cost of $8, and a 20 percent chance of a low marginal cost of $5. What is the firm's expected marginal cost?

• A)$7.80
• B)$9.20
• C)$8.40
• D)$8.00

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