Here is the cost information for a typical shoe store in a perfectly competitive industry:

 

a) Complete the table for the average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC).

b) At what market price will this firm shut down in the short run? How much are the profits or losses at this point?

c) If the current market price is $75.00, determine what output, Q, this firm should produce in order to maximize profits? Calculate the profits or losses that this firm would earn.

d) If the current market price is $65.00, determine what output, Q, this firm should produce order to maximize profits? And, calculate the profits or losses that this firm would earn.

e) If the current market price is $55.00, determine what output, Q, this firm should produce in order to maximize profits? And, calculate the profits or losses that this firm would earn.

f) If the current market price is $135.00, determine what output, Q, this firm should produce order to maximize profits? And, calculate the profits or losses that this firm would earn.

g) If the current market price is $185.00, determine what output, Q, this firm should produce in order to maximize profits? And, calculate the profits or losses that this firm would earn.

AVC ATC Output/ Month Total Fixed Cost Total Variable Cost Total Cost, TC AFC MC 50 1 50 95 50 150 3 50 195 4 50 240 5 50 290 6 50 360 50 490 8 50 672 00