Answer (C) is correct . The firm will produce 9 units because at that level marginal revenue ($290) is closest to marginal cost ($285). At $290 per unit, revenue will be $2,610. At $205 per unit, total cost will be $1,845, leaving $765 of profit.
Answer (A) is incorrect because At 7?units of output, marginal costs are less than marginal revenue; a rational firm will increase production.
Answer (B) is incorrect because At 8?units of output, marginal costs are less than marginal revenue; a rational firm will increase production.
Answer (D) is incorrect because At 10 units of output, marginal costs are higher than marginal revenue; thus, economic profit will be less for an output of 10 units than for an output of 9 units.
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If the market price for Gator’s product is $290, this firm should produce