Part A: Table Analysis Sections 7.2 & 7.3 Production Cost and 8.2 & 8.3 Perfect Competition and Marginal Analysis

Sweet Syrup's table for questions 1 to 4

Sweet Syrup Inc. produces and sells syrup to the market. The table records the production schedule from 0 to 12 bottles and their corresponding total cost on a certain day. The market price for each bottle of syrup is $8.

Quantity (Q) Bottles per day	Total Cost (TC)	Marginal Cost (MC)	Total Revenue (TR)	Marginal Revenue (MR)	Total profit/loss
0	15
1	22
2	27
3	30
4	32
5	33
6	34
7	36
8	40
9	44
10	51
11	60
12	76

• (3 points) From the given information, calculate total revenue, total profit/loss, marginal cost, and marginal revenue. Fill in the table with your calculated figures. Write down which formula you are using for the answers. Demonstrate a few examples of your mathematical work so that you don't need to type up all mathematical work in the table.
• (1 point) At which quantity of production level will Sweet Syrup maximize profit?
• (1 point) How much is the profit at this quantity?
• (3 points) Describe this profit maximizing decision by means of marginal analysis (comparing marginal revenue and marginal cost).

Part A: Graphical Analysis Sections 7.2 & 7.3 and 8.2 and 8.3

Questions 5 and 6 is not related to part A

The above diagram shows the average cost curves for a perfectly competitive wheat farmer.

• (2 points) How many bushels of wheat does the farmer produce if the price is $3 per bushel? Explain why in terms of perfect competition market structure and marginal analysis.

• (2 points) If the price falls to $1.50 per bushel in the next season, based on the shut down rule and assuming other things the same, should the wheat farmer stay open or shut down in the next season? Explain in terms of revenue, fixed cost, and variable cost, and shut-down rule.