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A firm has leased plant and equipment to produce video-game cartridges, which can be sold in...

A firm has leased plant and equipment to produce video-game cartridges, which can be sold in unlimited quantities at $21 each. The following figures describe the associated costs of production:

Rate of Output (per day)                0           1           2           3           4           5           6           7           8

Total Cost (per day)                   $50       $55       $62       $75       $96       $125     $162     $203     $248

a. How much are fixed costs?

b. Graph the total revenue and total cost curves on one graph.

c. Draw the average total cost (ATC), marginal cost (MC), and demand curves of the firm on a different graph.

d. What is the profit-maximizing rate of output? Should the producer shut-down? Explain your answer.

    (What is the size of the loss if production shuts down? If production continues?)

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