Do the firms in an oligopoly act independently or interdependently? Explain your answer.

A perfectly competitive firm has the following fixed and variable costs in the short-run. The market price for the firm's product is $140.

OUTPUT FC VC TC TR PROFIT/LOSS

0 $80 $0 _ _ _

1 80 90 _ _ _

2 80 170 _ _ _

3 80 290 _ _ _

4 80 430 _ _ _

5 80 590 _ _ _

6 80 770 _ _ _

Complete the table.

What level of output should the firm produce to maximize profits?

Assume this firm is making a loss when it produces its 7thunit of output. What should the firm do in the short-run? Should it operate at loss or shutdown in the short-run?