Question: ................................... (A). For the following, please answer True or False and explain why. If a firm sets marginal revenue equal to marginal cost, it will
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(A). For the following, please answer "True" or "False" and explain why. "If a firm sets marginal revenue equal to marginal cost, it will make an economic loss". [4 points] (B). In a competitive market, the following supply and demand equations are given: Supply P = 5 + 0.36Q Demand P = 100 - 0.04Q, where P represents price per unit in dollars, and Q represents rate of sales in units per year. Determine the equilibrium price and quantity. Determine the deadweight loss that would result if the government were to impose a price ceiling of 40 dollars per unit. [6 points]
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