1) Complete the following table:

Quantity	TVC	TFC	TC	AVC	AFC	ATC	MC	PRICE
0	0	50						80
1	50							80
2	90							80
3	110							80
4	150							80
5	210							80
6	290							80
7	410							80

1. After which quantity level does diminishing marginal returns begin?
2. Which level of production (quantity) maximizes profit for a perfectly-competitive firm?
3. What would be the profit at the profit maximizing level of output?

• Why the cost of production diminishes at first and then rises
• Why some costs remain constant at all levels of production
• What the profit maximizing level of output means and why it is not necessarily at the maximum level of workers given in the table
• What happens if you continue to increase output above the profit maximizing level
• Whether this is a long run view or a short run view