A firm has the following production function: Q=f (L/K). It must pay $20 per hour of labor and rents its fixed inputs (K) for $30 per unit.

Complete the following table and answer the questions that follow:

Units of fixed input K	Labor Hours (L)	Output (Q)	TFC	TVC	TC	AFC	AVC	ATC	MC
3	0	0
3	1	4
3	2	90
3	3	160
3	4	200
3	5	230
3	6	250
3	7	260
3	8	265

1. Plot AFC, AVC, ATC, and MC on a graph. Explain what happens to each one as output increases and why.

1. If the price of the output is $1, how many units of output should the firm produce to maximize profit? What is the firm's profit level?

1. If the firm produces 265 units of output and sells it at $1 per unit, is it making profits or losses? How much are they making?