Q1.A firm is selling its product in a perfectly competitive market, and the price for its product is $10. Fill in the following table for the columns of price, total revenue, profit, marginal revenue, and marginal cost. If this firm is maximizing profit, how many units of output should it produce? (10)

Quantity Sold

Price

Total Revenue

Total Cost

Profit

Marginal Revenue

Marginal Cost

0

5

1

7

2

10

3

14

4

19

5

25

6

32

7

40

8

49

9

59

10

70

Q2: Use a graph to demonstrate the circumstances that would prevail in a competitive market where firms are earning economic profits. Can this scenario be maintained in the long run? Carefully explain your answer. (6)