2. Suppose that a perfectly competitive firm has the following total variable costs ( TVC): Quantity: T. 2 4 5 TVC: 50 56 5 11 $ 15 5 18 $ 22 5 28 It also has total fixed costs ( TFC ) of 5 6. If the market price is $ 5 per unit. a. Find the firm's profit- maximizing quantity using the marginal revenue and marginal cost approach. b. Check your results by re- solving the problem using the total revenue and total cost approach. Is the firm earning a positive profit, suffering a loss, or breaking even? TVC MC MR IFC TC TR Econoni c Profit 0 $0 $6 $0 $e 5 1 12 5 -7 5 11 17 10 .7 1 5 3 15 21 15 . 6 5 4 18 24 20 4 5 27 28 25 3 5 6 28 34 30 -4 5. Assume that the kitty litter industry is perfectly competitive and is presently in long- run equilibrium: a. Draw diagrams for both the market and a typical firm, showing equilibrium price and quantity for the market, and MC, ATC, AVC, MR, and the demand curvefor the firm b. Your friend has always had a passion to get into the kitty litter business. If the market is in long- run equilibrium, will it be profitable for him to jump in headfirst ( so to speak)? Why or why not? C. Suppose people begin to prefer dogs as pets, and cat ownership declines. Show on your diagrams from part ( a) what happens in the industry and the firm in the long run, assuming that this is a constant cost industry. 8. soume that the firm shown in the following table produces output using one fixed input and one variable inquit Total Total Marginal Total Marginal Output Price Revenue Reverie Cost Cost Profit 0 $ 50 $0 $ 5 $ 35 1 $ 50 $ 15