Consider a firm with the following totalvariablecost.

Quantity: 1,2, 3, 4, 5, 6, 7, 8, 9

Total Variable Cost:12, 20, 24, 28, 34, 42, 52, 64, 78

1. There is fixed costs of 18.On a sheet of paper, copy the above TVC schedule and add a rows (or columns, whichever you prefer) for average variable cost (AVC), total cost (TC), and average total cost/average cost (ATC/AC).Finally, add a row/column for marginal cost (MC).

2. Roughly sketch the marginal cost and the two average cost curves on a graph.Sketch the general shapes and where they cross.

3. If the fixed cost is sunk, what is the minimum price that would make this firm willing to produce a nonzero quantity?

4. If the fixed cost is NOT sunk (i.e. in the long run) what is the minimum price that would make this firm willing to produce a nonzero quantity?