Consider the following hourly demand and cost schedule for a Perfectly Competitive firm facing a fixed price. (T, is Total Profit).

Q P TRMRTCTVCMCATCAVCT

0$8.00$3.00

14

26

3 8

411

515

620

726

833

941

1050

1160

a.Complete the columns for ATC, AVC, and MC as well as those for (TC), TVC, & TFC.

b.Draw the curves for Demand, MR (Marginal Revenue), ATC, AVC, and MC, all in one diagram. Also draw the Total Revenue (TR), Total Cost (TC), TVC, and TFC in a second diagram right below the first one.

c.Determine, in order to maximize profit, how many units should this firm produce and why?

d.Calculate the total profit at the profit-maximizing level and demonstrate it graphically and geometrically in both diagrams.