A Firm Sells Its Output in a Competitive Market The Market Price Is $7 Per Unit

question 139

Essay

A firm sells its output in a competitive market. The firm's total cost function is given in the accompanying schedule: $\begin{array}{cc}\text { Output }&\text { Total Cost(in dollars) }\\0 & \$ 5 \\1 & \$ 11 \\2 & \$ 17 \\3 & \$ 21 \\4 & \$ 26 \\5 & \$ 33 \\6 & \$ 43\end{array}$ The market price is $7 per unit.
a. What is the firm's profit-maximizing output level?
b. Is the industry in long-run equilibrium? Explain.

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Definitions:

Competence

The ability of an individual to perform a job or task correctly, or in legal terms, the capacity to stand trial or make legally binding decisions.

Nondisclosure

An agreement in which one party agrees to keep certain information confidential and not to share it with third parties.

False Assertion

False Assertion occurs when an inaccurate or untrue statement is made, particularly in contexts where the truthfulness of statements is critical, such as in contracts or testimonials.

Nondisclosure

An agreement or principle that restricts the sharing of confidential information or secrets with unauthorized parties.