Question

A perfectly competitive firm has leased plants and equipment to produce video game cartridges, which can be sold in unlimited quantities at $21 each. The following describes the associated costs of production:

Rate of output/day	0	1	2	3	4	5	6	7	8
Total Cost / day	$50	$55	$62	$75	$96	$125	$162	$203	$248

(a) How much are fixed costs?

Instructions: Enter your responses as a whole number.

$

(b) Compute total revenue for the table below.

Rate of output/day	0	1	2	3	4	5	6	7	8
Total Revenue	$	$	$	$	$	$	$	$	$

(c) Compute the average total cost (ATC), marginal cost (MC) and demand curve values for the firm below.

Rate of output/day	0	1	2	3	4	5	6	7	8
Total Cost / day	$50	$55	$62	$75	$96	$125	$162	$203	$248
Average Total Cost	---	$	$	$	$	$	$	$	$
Marginal Cost	---	$	$	$	$	$	$	$	$
Demand Curve	$	$	$	$	$	$	$	$	$

(d) What is the profit-maximizing rate of output?

units

(e) Should the producer stay in business in the short run?

	Not enough information
	Yes
	No

(f) What is the size of the loss if production continues?

Instructions: Enter your response as a whole positive number.

$ loss

(g) How much is lost if the firm shuts down?

Instructions: Enter your response as a whole positive number.

$ loss