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Homework5 - Econ 1 Winter 2008 Dr Narag 1 Homework 5(1 You...

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Econ 1 Winter 2008 Dr. Narag 1 Homework 5 (1) You are hired as a consultant to a firm in a perfectly competitive market that sells tennis racquets at a market price of $35. The firm’s cost schedule is as follows: Fill in the table above. What is the firm’s profit maximizing level of output? (2) Firm ABC is a price taker. It has the following hourly costs: Output Total Cost (Q per hour) (dollars per hour) 0 $10 1 21 2 30 3 41 4 54 5 69 6 86 a) If Q sells for $15, what is ABC’s profit-maximizing output per hour? What is his profit? Your answer must include graphical as well as numerical solutions.
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