A firm sells in a competitive market in which price is $12. Its marginal cost is 6 + 0.25Q. Determine the profit-maximizing level of output.
What will be an ideal response?
The solution requires equating P = MC to determine Q:P = 12 = MC = 6 + 0.25Q12 = 6 + 0.25Q6 = 0.25QQ = 24
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