11. Marty sells flux capacitors in a perfectly competitive market. His marginal cost is given by MC = Q. Thus, the first capacitor Marty produces has a marginal cost of $1, the second has a marginal cost of $2, and so on.

a. Draw a diagram showing the marginal cost of each unit that Marty produces.

b. If flux capacitors sell for $2, determine the profit-

maximizing quantity for Marty to produce.

c. Repeat part

(b) for $3, $4, and $5.

d. The supply curve for a firm traces out the quantity that firm will produce and offer for sale at various prices. Assuming that the firm chooses the quantity that maximizes its profits

[you solved for these in

(b) and (c)], draw another diagram showing the supply curve for Marty’s flux capacitors.

e. Compare the two diagrams you have drawn.

What can you say about the supply curve for a competitive firm?