Q TVC MC AVC ATC

0 $5

1 10

2 13

3 18

4 25

5 34

6 45

Market demand for the firm's product is give by the following market demand schedule.There are 100 firms in this industry that all have identical costs to this firm.Using the data from the previous table determine the figures for Quantity supplied.

The Firm's supply Market demand and supply

P Q P Quantity Demanded Quantity Supplied

12 6 $12 300

10 5 10 500

8 4 8 800

6 3 6 1,200

4 2 4 1,800

Question 1:The equilibrium market price is:

A. $10

B. $8

C. $6

D. $4

Question 2: The optimal output for the firm in the previous question is

A. 2

B. 3

C. 4

D. 5

Question 3: In the previous question, the firm's total profit is

A. $18

B. $16

C. $14

D. $12

Question 4: Which of the following statements is correct

A. A profit-maximizing firm should select the output level at which the difference between the market price and the marginal cost is greatest

B. An increase in fixed cost lowers the profit-maximizing quantity of output produced in the short run

C. A perfectly competitive firm should shut down if the firm's total revenue does not cover all of its variable costs

D. Because of free entry, a perfectly competitive firm cannot earn economic profit in the short-run