(Units) Total Cost
Total costs include a “normal” return on the time (labor services) and capital that the owner has invested in the firm. The prevailing market price is $ 7 per unit.
a) Prepare ( i ) marginal cost and ( ii ) average total cost for the firm.
b) What is the firms profit maximizing output level?
c) Is the industry in long-run equilibrium? Justify your answer.
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