Question: Suppose a firm operates with a marginal cost function MC(q) = 40 - 7q, where q is the quantity of output, in a perfectly competitive

Suppose a firm operates with a marginal cost function MC(q) = 40 - 7q, where q is the quantity of output, in a perfectly competitive industry. If the market price is $5/unit, this firm's profit-maximizing quantity is ____________.

1.2 units

5 units

6 units

7.2 units

Suppose a firm operates with an average cost function AC(q) = 36 + 40q - 3.5q2, where q is the quantity of output, in a perfectly competitive industry. This firm's quantity of output is ____________ in the long run.

5.71 units

6 units

7.2 units

5 units

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