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    Assume that a perfectly competitive firm is currenly producing 5,000 units of output and is earning $10,000 in total revenue. The marginal cost of the 5,000th unit of output is $3. Is this firm producing the profit maximizing level of output? How do you know?

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    In a perfectly competitive market, a firm's marginal revenue is constantly the market price, i.e., MR = ...

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    Profit Maximzing level of output summary is displayed.