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Assume that a profit-maximizing firm is perfectly competitive in both the output and the factor markets and is at its long-run equilibrium. The firm's output is 100 units, its total revenue is $600.00, and the fixed cost of production is $50.00. Based on this information, which of the following is true for the firm?
a. Its marginal cost is $5.50, and its average total cost is $5.50.
b. Its marginal cost is $5.50, and its average variable cost is $5.50.
c. Its marginal cost is $6.00, and its average total cost is $5.50.
d. Its marginal cost is $6.00, and its average fixed cost is $5.50.
e. Its marginal cost is $6.00, and its average variable cost is $5.50.
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Assume that a profit-maximizing firm is perfectly competitive in both the output and the factor mark...
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