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Question
Suppose a perfectly competitive paper firm can produce six tons of paper at an output level where marginal revenue is equal to marginal cost. The price per ton of paper is $100 and the average total cost is $75. What is the total profit or loss that the paper firm is earning?
a. $150.00
b. $450.00
c. $600.00
d. -$150.00
e. -$450.00
Answer
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