Suppose That a Perfectly Competitive Firm's AVC Curve Is Given

question 123

Multiple Choice

Suppose that a perfectly competitive firm's AVC curve is given by AVC = WQ, and its marginal cost curve is given by MC = 2WQ, where W is the wage rate. Assume W = 10. At a market price of $3,200, the firm will produce a quantity of ____ to maximize profit.

• A) 200
• B) 160
• C) 120
• D) 80

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Definitions:

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