1. A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm's product is $140.

 

Output	FC	VC	TC	TR	Profit/Loss
0	$75	$0	___	___	___
1	75	90	___	___	___
2	75	170	___	___	___
3	75	290	___	___	___
4	75	430	___	___	___
5	57	590	___	___	___
6	75	770	___	___	___

 

1. a. Complete the table.
2.  
3. b. What level of output should the firm produce to maximize profits?
4.  
5. c. Assume this firm is making a loss when it produces its seventh unit of output. What should the firm do in the short run? Should it operate at loss or shut down in the short run?

 

Transcribed Image Text:

Carlisle Transport had $4,499 cash at the beginning of the period. During the period, the firm collected $1,750 in receivables, paid $2,154 to supplier, had credit sales of $5,578, and incurred cash expenses of $500. What was the cash balance at the end of the period? Carlisle Transport had $4,499 cash at the beginning of the period. During the period, the firm collected $1,750 in receivables, paid $2,154 to supplier, had credit sales of $5,578, and incurred cash expenses of $500. What was the cash balance at the end of the period?