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A perfect competition firm has selling price of P=21 $ and the relationship between its output and total cost as below: Q 0 1 2

A perfect competition firm has selling price of P=21 $ and the relationship between its output and total cost as below:

Q 0 1 2 3 4 5 6 7 8

TC($) 50 55 62 75 96 125 162 203 248

1. What are TR, MC, FC, VC, AVC, AFC, ATC ?

2. Identify optimal output level (Q *) that gives the firm profit maximization? What is the maximum profit ?

3. With the above profit (in the question 2), should the firm continue the production? Why?

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