Final answer:
In a perfectly competitive market, a firm sets production where marginal cost equals market price. Given the marginal cost equation MC = 1 + q and a market price of $9, solving the equation results in q* = 8 units(option A).
Step-by-step explanation:
The student asked a question related to a firm operating in a perfectly competitive market, the firm faces a given market price of $9 to sell its product.
According to the economic principle that in a perfectly competitive market, firms produce where marginal cost (MC) equals the market price, the firm will determine its optimal output level - referred to as q*.
Given that the marginal cost (MC) is represented by the equation MC = 1 + q, the firm will set MC equal to the market price of $9 to find the profit-maximizing output level q*. Solving the equation, 9 = 1 + q, we find that q = 9 - 1 = 8.
Therefore, the correct answer is A. 8 units, as this is the quantity where the marginal cost of production is equal to the price the firm can charge in a perfectly competitive market.