1.  A firm has the following relationship between output (Q) and total cost (TC):

Q	TC
0	$100
1	110
2	130
3	160
4	200
5	250
6	310
7	380
8	460
9	550
10	650

1. Say the firm is a perfect competitor. If the market price for its product is $ 80, at what output level will this firm produce at (as a profit maximizer)?

2. At the output level in (a), are firms in this industry making a profit or loss? Will firms enter or exit the market?

3. Say this firm is a monopoly. If the firm maximizes profit where marginal revenue equals $ 50, at what output level will the firm be producing at (as a profit maximizer)?

Answer rating: 100% (QA)

To determine the output level at which a perfect competitor firm will produce as a profit maximizer we need to compare the market price with the firms ... View the full answer