Answer the questions below using the cost curves for the price-taking firm shown in the following graph:

a. If price is $7 per unit of output, draw the marginal revenue curve. The manager should produce__________ units to maximize profit.b. Because average total cost is $__________ for this output, total cost is $ __________.c. The firm makes a profit of $ __________.d. At __________units, profit margin (or average profit) is maximized. Why is this output level different from the answer to part a?e. Let price fall to $3, and draw the new marginal revenue curve. The manager should now produce__________ units to maximize profit.f. Total revenue is now $__________ and total cost is $ __________. The firm makes a loss of $ __________.g. Total variable cost is $ __________, leaving $__________ to apply to fixed cost.h. If price falls below $ __________, the firm will produce zero output. Explain why.

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SMC 8 ATC 7 AVC 2 1 100 200 300 400 500 600 700 800 900 Output Price and cost (dollars) 3.