Answer the questions below using the cost curve for the price-taking firm shown in the following graph:

1. If price is $7 per unit of output, draw the marginal revenue curve. The manager should produce ____ units in order to maximize profit.
2. Since average total cost is $ ____ for this output, total cost is $ ____
3. The firm makes profit of $ ____
4. At ____ units, profit margin (or average profit) is maximized why is this output level different from the answer to part a.

Pepsi: Low Medium High Coke:Low A B $560, $600 $400, $400 $320, $720 Medium D E $500, $300 $450, $525 $540, $500 High G $375, $420 $300, $378 $525, $750