Cost and Revenue of goods X .

QUANTITY PRICE=MARGINAL REVENUE ($) AVERAGE COST ($)

0 NOT AVAILABLE NOT AVAILABLE

1 8 9

2 8 5

3 8 3.65

4 8 3.25

5 8 3.8

6 8 4.5

7 8 5.29

a) referring table 1 , calculate the total cost and marginal cost for each quantity level.

b) based on your answers in part (a) explain why the firm operates under a competitive industry .

how many goods x should the firm produce at the optimal output level ? does the firm earn profits at the optimal output level?