3. Consider the following table of numbers, which represents demand and cost conditions for a competitive firm. The price of the product this firm produces and sells in the market is $50.

Q	TFC	MC	TVC	TC	TR	MR	Total Profit
0	30	0	0	30
1	30	20		50
2	30	30		80
3	30	40		120
4	30	50		170
5	30	60		230
6	30	70		300

1. Fill in the missing values.

1. Does the table represent the short-run in production or the long-run? How do you know?

1. Given the values in the table above, over what range of output economies of scale are present?

1. What output level should the firm produce to maximize profit? Why?

1. Is the firm earning profit or loss at the profit maximizing output level? How do you know?

1. Calculate the firm profit or loss.

1. Should the firm operate or not in the short-run? Explain

4. For cases A through D below, would you operate or shut down in the short-run. Briefly explain your answer. (4 points)

A B C D

Total revenue 1,500 2,000 5,000 5,000

Total cost 1,500 1,500 6,000 7,000

Total fixed cost 500 500 1,500 1,500

Firm A:

Firm B:

Firm C:

Firm D: