Problem #1 A producer of swimming pool accessories hires a company to assist them in determining the profit maximizing level of output, the price and total profits. Management is given two demand curves: Q = 210 - 30*P (for price increases) Q' = 90 -10*P (for price decreases) The firm also knows their cost structure: MC = 3.5 + Q/30 and ATC = .5 + Q/60 Assume output, Q, goes from 0 to 90 units. a. Draw, neatly and legible, a graph of the two demand functions, their respective marginal revenue curves, the marginal cost (MC) function and the average variable cost (ATC) function. b. What is the profit maximizing output, Q*, and price, P*, for this firm? c. What is the average profit/unit and total profit () for this firm? d. Within what rance can the MC curve shift without causing a change in the profit maximizing output, Q*, or the corresponding price, P*?