1. A firm which produces ice creams faces a downward-sloping demand curve. The firm sells the following number of ice creams per day at each of the prices shown. The firm's total costs are also shown. The firm wants to find out how many ice creams it should sell to maximise its profits.

2) A firm which produces ice creams faces a downward-sloping demand curve. The firm sells the following number of ice creams per day at each of the prices shown. The firm's total costs are also shown. The firm wants to find out how many ice creams it should sell to maximise its profits. Quantity Sold 0 100 200 300 400 500 600 700 (Output) Price (Average 25 20 18 16 15 14 11 Revenue E) Total Costs (E) 1,000 |2,000 | 2,500 | 2,800 4,200 | 6,000 | 8,000 11,000 a. For each level of sales of ice creams, calculate the firm's total revenue (TR) and total profit (TII). Quantity 0 100 200 300 400 500 600 700 Total Revenue Total Profit b. Sketch a diagram showing the TC and TR curves, mark the profit maximising output. c. Using total revenue and total cost curves is one method of identifying the profit-maximising output of a firm. Outline the other way of finding the profit-maximising output. d. Explain the circumstances under which a firm may decide to stop production in the short run