The market for sweet potatoes consists of 1,000 identical firms. The market demand curve is given by Qd = 1000 - 5P. Each firm has a short-run total cost curve of STC = 100 + 100 q + 100q2, and a short-run marginal cost curve of SMC=100+200q, where q is output. All fixed costs are sunk. In short-run market equilibrium, each individual firm will
A) earn a short-run profit.
B) earn a short-run loss.
C) earn zero economic profit.
D) produce an output of q = 4.
Correct Answer:
Verified
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