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1. If a profit-maximizing competitive firm has constant returns to scale, then its long-run profits must...

1. If a profit-maximizing competitive firm has constant returns to scale, then its long-run profits must be zero. True or False? Explain your answer.

2. A firm is producing output using one variable factor of production. The firm’s production function is y = 8x¹ˡ². The price of the output is $24 and the price of input is $8 per unit. How many units of the input should the firm use?

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