Consider the table above. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $12.50 and the equilibrium price of the product is $0.50. How many units of the resource will be hired by a profit maximizing firm? a. 1 unit b. 2 units c. 3 units d. 4 units e. Not enough information provided.

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A: TC=712+q2Now,AC=TCqAC=712q+q

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