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MC ATC D AVC C K In the accompanying graph, at what level of output will the firm earn a maximum unit-profit margin (or profi

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At Production level 0B Marginal Cost equals to Average Total Cost and this is the lowest level possible for ATC

We have Price level fixed as Demand curve is horizontal hence lower the ATC higher the profit margin per unit

Hence it is clear that at production level of 0B we have highest possible profits

Option A is correct

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