A perfectly competitive firm faces a market-determined price of $25 for its product.The answer to each part of the question is worth four points.

a.The firm's total costs are given below.Fill in columns 3 and 4 for average total cost and marginal cost.

b.Fill in columns 5 and 6 for marginal revenue and profit margin.

c.How much output should the competitive firm produce?Explain why.

d.Draw the marginal cost, average total cost curve, and marginal revenue curve for the firm.

e.Fill in column (7) on total profit.Does your answer from column (7) agree with your answer to part c?If not, explain why.

f.Identify the profit maximizing level of output on your diagram from part d.

g.Suppose the demand for the industry product decreases and the price falls to $14.What quantity should the firm produce now?How much is profit?

(1)(2)(3) (4)(5)(6)(7)

QuantityTCATC MCMRprofit per unit Total profit

0001000

1002000

2003300

3004800

4007000

5008000