Perfect Competition Market

Kate's Katering provides catered meals, and the catered meals industry is perfectly competitive. Kate's machinery costs $40 per day and is the only fixed input. Her variable cost consists of the wages paid to the cooks and the food ingredients. The variable cost per day associated with each level of output is given in the accompanying table.

Quantity of meals	TVC	TC	AVC	ATC	MC
0	0
7	42
14	110
21	190
28	308
35	490

1. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output and complete the table.
2. The firm will shut down if price falls below____________.
3. The firm will have positive economic profit, if the price is more than ________.
4. The firm will have loss, if the price is more than_______, but less than________.
5. The firm will have zero economic profit, if the price equals___________.
6. Explain your answers in paragraphs b, c, d, e.