1. A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions:

TR = 10Q

TC = 2 + 2Q + Q2

MC = 2 + 2Q

At the level of output maximizing profit, the above firm's level of economic profit is __________

A.$0 B. $4 C. $6 D. $8

2. Scenario 2:

Output (Q): 0 1 2 3 4 5 6

Total Cost (TC): $24 $33 $41 $48 $54 $61 $69

Refer to Scenario 2. The average fixed cost of 2 units of output is:

A.$8.00. B. $8.50. C. $12.00. D. $20.50.

3.Scenario 3:

Total Product (Q): 0 1 2 3 4 5 6

Total Cost (TC): $50 $80 $105$125 $155 $195 $250

Refer to Scenario 3. Diminishing marginal returns are incurred when output is increased from:

A.1 to 2 units of output.

B.2 to 3 units of output.

C 3 to 4 units of output.

D. 4 to 5 units of output.