1. (Short-Run Profit Maximization) A monopolistically competitive firm faces the

following demand and cost structure in the short run: See the textbook for the data...

Output Price FC VC TC TR Profit/Loss

0 $100 $100 $0

1 90. 50

2 80 90

3 70 150

4 60 230

5 50 330

6 40 450

7 30 590

a. Complete the table.

b. What is the highest profit or lowest loss available to this firm?

c. Should this firm operate or shut down in the short run? Why?

d. What is the relationship between marginal revenue and marginal cost as the firm

increases output?