Complete the following question.

1. Given the following information:

Total Product (TP) Price Fixed Cost (TFC) Variable Cost (TVC)

0 $3500 $2000 $ 0

1 3500 2000 4000

2 3500 2000 7000

3 3500 2000 7500

4 3500 2000 11000

5 3500 2000 16000

6 3500 2000 24000

1. Based upon the numbers from the table above, is this firm is operating in the short-run or

the long-run? How do you know which time period it is operating in? (4 points)

2. Based upon the numbers from the table above, how do you know that this firm

exemplifies a purely competitive firm? (3 points)

3. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC),

average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue

(MR) at every total product quantity. (36 points)

4. What is the profit maximizing level of total product (TP) in this example? (3 points)
5. At a quantity of 1, will this firm produce or shutdown? Explain.

How much of a profit or loss does the firm incur based upon their decision to produce or

shutdown? (9 points)

6. At a quantity of 2, will this firm produce or shutdown? Explain.

How much of a profit or loss does the firm incur based upon their decision to produce or

shutdown? (9 points)

7. At a quantity of 3, will this firm produce or shutdown? Explain.

How much of a profit or loss does the firm incur based upon their decision to produce or

shutdown? (9 points)

8. At a quantity of 4, will this firm produce or shutdown? Explain.

How much of a profit or loss does the firm incur based upon their decision to produce or

shutdown? (9 points)

1. At a quantity of 5, will this firm produce or shutdown? Explain.

How much of a profit or loss does the firm incur based upon their decision to produce or

shutdown? (9 points)

10. At a quantity of 6, will this firm produce or shutdown? Explain.

How much of a profit or loss does the firm incur based upon their decision to produce or

shutdown? (9 points)