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-(Table: Total Cost and Output) Look at the table Total Cost and Output, which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. If the market price of a tub of ice cream is $35, how many tubs of ice cream will Sergei produce in the short run?

Question

Use the following to answer questions: 
-(Table: Total Cost and Output) Look at the table Total Cost and Output, which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. If the market price of a tub of ice cream is $35, how many tubs of ice cream will Sergei produce in the short run?

Quizplus · Accepted Answer

In a perfectly competitive market, a firm will produce where marginal cost (MC) equals the market price. Assuming the table provides the necessary cost data, Sergei will produce the quantity where the MC of producing an additional tub is equal to or just below $35.

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