5. Deriving the short-run supply curve Consider the perfectly competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry, 80 72 64 56 48 PRICE AND COST PER UNIT (Dollars) 40 ATC 32 24 16 8 AVC 0 0 80 8 16 24 32 40 48 56 64 72 QUANTITY OF OUTPUT(Thousands of jackets) For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximire its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the loss-minimizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price (Dollars per jacket) 4 Output (Jackets) Produce or Shut Down? Profit or Loss? 8 12 36 48 60 On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) ? 0 72 O Firm's Short-Run Supply 56 46 PRICE (Dollars per jacket) 40 32 24 15 8 0 0 80 16 24 32 40 48 56 64 72 QUANTITY OF OUTPUT (Thousands of jackets)