OUTPUT AND COSTS 7. ABC Cottage is a small resort in Northern B.C. and that resorts are a perfectly competitive industry. Quantity of rooms (Q) Total Fixed Cost (TFC) Total Variable Cost (TVC) Total Costs (TC) Average Fixed Costs (AFC) Average Variable Costs (AVC) Average Total Costs (ATC) Marginal Cost (MC) 0 1080 - - - - 1 400 400 2 965 450 3 2430 4 1900 475 5 2500 216 6 700 a. Complete the table above. b. If the price is $520, how many rooms will ABC Cottage offer? Explain your answer. c. Calculate ABC Cottage's profit (or loss). PERFECT COMPETITION 8. A representative firm in a perfectly competitive market has a total cost function c(q) = 2000 + 2q + 0.05q2 and MC(q) = 2 + 0.1q a. What is the firms average total cost (ATC), average fixed cost (AFC), and average variable cost (ATC)? b. If the price of the good is $20, how much quantity will the firm produce? What will be the firm's profit (or loss)? c. All firms have the same cost function. In the long run, how much quantity will the firm produce, and at what price? What will be the firm's profit (or loss)? d. There are 10 consumers in this economy, each individual has their own demand function Qd = 1060 - 10p. What is the market demand function? e. What will market demand be in the long run? How many firms will there be? MONOPOLY 9. A monopolist firm has a total cost function of c(q) = 1000 + 10q + 0.003q2 , marginal cost function MC(q) = 10 + 0.006q, and a market demand function of Qd = 30,000 - 500p. a. Determine the inverse demand function. b. What is the profit-maximizing quantity and price? c. What profit (or loss) will the monopolist make