Question

Quantity	TC	Price of	TR	ATC	AVC	MC	MR	MR-MC	Profit	change in
		good								profit
0	10	5	0
1	15	5	5	15	5	5	5
2	18	5	10	9	4	3	5
3	20	5	15	6.67	3.33	2	5
4	21	5	20	5.25	2.75	1	5
5	23	5	25	4.6	2.6	2	5
6	26	5	30	4.33	2.67	3	5
7	30	5	35	4.29	2.86	4	5
8	35	5	40	4.38	3.13	5	5
9	41	5	45	4.56	3.44	6	5
10	48	5	50	4.8	3.8	7	5
11	56	5	55	5.09	4.18	8	5

This is a firm in a perfectly competitive market. The selling price is $5.

Fill in the table below and enter the answers to the questions down below:

1-How many units should be produced?

2- What will be the profit per unit?

3- What will be the total profit?

4- If the price were to drop to $4 how many units should be produced?

5- What will be the total profits?

6- If the price falls to $1, how many units should be produced?

7- At what price will you break even?

8- At what price should the company close down?

9- At what price will you be minimizing losses?

10- There are 2 ways of calculating the change in total profits. List and explain what information you would use.

Answer 1