2. Consider a firm in a perfectly competitive industry.

The firm has just built a plant that cost $15,000.

Each unit of output requires $5 worth of materials.

Each worker costs $3 per hour.

a. Based on the information above, fill in the table on the following page.

b. If the market price is $12.50, how many units of output will the firm produce?

c. At that price, what is the firm’s profit or loss?

Will the firm continue to produce in the short run? Carefully explain your answer.

d. Graph your results.