A Firm in a Competitive Market Has the Following Cost

question 369

Multiple Choice

A firm in a competitive market has the following cost structure:
Output
ATC
0
--
1
$10
2
$8
3
$7
4
$8
5
$10
If the firm's fixed cost of production is $3, and the market price is $10, how many units should the firm produce to maximize profit?

• A)1 unit
• B)2 units
• C)3 units
• D)4 units

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Definitions:

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