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Chauncey's Burgers Sells Hamburgers in a Monopolistically Competitive Industry

Question 28

Multiple Choice

Chauncey's Burgers sells hamburgers in a monopolistically competitive industry. Chauncey faces an inverse demand curve of P = 9 - 0.4Q, where Q is measured in hamburgers per hour and P is the price per hamburger. The total cost is TC = 20 + Q, and marginal cost is constant at $1. What is Chauncey's hourly profit?


A) $15
B) $20
C) $35
D) $70

Correct Answer:

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