A Representative Firm with Long-Run Total Cost Given by TC

question 5

Multiple Choice

A representative firm with long-run total cost given by TC = 20 + 20q + 5q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,400 - 40P and Q_S = -400 + 20P.If it continues to operate in the long run,its profit-maximizing level of output is:

• A) 1 unit.
• B) 2 units.
• C) 4 units.
• D) 5 units.
• E) 6 units.

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