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10 September, 10:53

If the market price is $10, what is the firm's total cost?

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  1. 10 September, 10:54
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    Answer: Profit per unit is equal to price minus average total cost. Since this is a perfectly competitive firm, it takes the market price as given; thus the firm's price is $10 per unit. At its current level of output, this firm's average total cost is $8 per unit. Thus this firm's profit per unit is $ (10 â€" 8) = $2 per unit
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