1. Suppose that the price of Oranges is $4 a bag. In addition, suppose that the firm's total costs are $320 and that the firm currently sells 110 bags of oranges.

Given this information, what is this firm's total revenue?

Use the following information to answer questions 2 through 5:

2. The table below shows data for the production of avocados for an individual firm operating in a perfectly competitive market. Given this data, complete the table: VALUE - 12 points out of 20

Quantity of Avocados	Total Revenue	Total Costs	Marginal Revenue (MR)	Marginal Costs (MC)	Profit
0	0	20	-	-
10	120	60
20	240	80
30	360	120
40	480	180
50	600	260
60	720	360
70	840	480
80	960	620

NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!

3. At what quantity does this firm maximize its profit and why?

What is marginal revenue at the profit maximizing quantity?

What is marginal cost at the profit maximizing quantity?

The graph(s) below shows cost curves for a firm operating in a perfectly competitive market. Curve 1 represents Marginal Cost (MC), Curve 2 represents Average Variable Costs (AVC) and Curve 3 represents Average Total Costs (ATC).

Transcribed Image Text:

21 20 22 Curve 3 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 Price of Oranges ($) 432 2 1 Curve 1 Curve 2 0 0 1 2 3 4 5 6 7 8 Quantity of Oranges 21 20 22 Curve 3 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 Price of Oranges ($) 432 2 1 Curve 1 Curve 2 0 0 1 2 3 4 5 6 7 8 Quantity of Oranges