A firm has the following total costs, where Q is output and TC is total cost:

Q	TC
0	$ 100
1	110
2	130
3	160
4	200
5	250
6	310
7	380
8	460
9	550
10	650
11	760

a.            Say the firm is in a perfectly competitive market. If the current market (equilibrium) price is $ 70, at what output level will the firm as a profit maximizer produce at?

b.            Say the market price rises to $ 100. At what output level (as a perfect competitor) will this produce at?

c.             How much profit is the firm making at a price of $90? Based on this calculation, do you expect firms to enter or leave this market?

d.            Say instead this firm is a monopoly. If the firm maximizes profit at an output level where marginal revenue equals $ 80, what output level will this be?

Answer rating: 100% (QA)

a The firm will produce at 3 units of output Total cost at 3 units of output is 160 Total revenue at 3 units of output is 210 70 x 3 Profit Total reve... View the full answer