(a) Given the following price, quantity, and cost numbers, estimate the profit-maximizing output, assuming that the firm is operating in a perfectly competitive market. What is the profit at the profit-maximizing output?

Price ($)	Quantity Sold (units)	Total Cost ($)
10	0	15
10	1	18
10	2	22
10	3	27
10	4	33
10	5	41
10	6	51
10	7	62

(b) Using an example of a bundle of two goods, explain graphically and in words the substitution effect and the income effect if the price of one of the goods falls.