A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:Qd = 25,000 ? 5,000P + 25MQs = 240,000 + 5,000P ? 2,000PIwhere P is price, M is income, and PI is the price of a key input. The forecasts for the next year are 
= $15,000 and 
I = $20. Average variable cost is estimated to beAVC = 14 ? 0.008Q + 0.000002Q2Total fixed cost will be $6,000 next year. Suppose income next year is forecasted to be $10,000 instead. What is the profit-maximizing output choice for the firm?
A. zero
B. 5,548
C. 3,480
D. 2,167
E. 8,000
Answer: D
Economics
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