Q5 Assume the following cost data are for a firm inperfect competition. Apply MC =MR rule to answer the questions given below. 15 marks

Output (units)	AFC ($)	AVC ($)	AC ($)	MC ($)
0	-----------	----------	---------------	--------------
1	90	60	150	150
2	45	48	93	36
3	30	42 min	72	30
4	22.5	45	67.5	54
5	18	49.2	67.2	66
6	15	54.99	69.99	83.94
7	12.84	63.42	76.26	113.88
8	11.25	74.25	85.5	150.18

a) Will this firm produce in the short period if the productprice is $80? What will be thetotal profits or loss of the firm?

TR = TC = Profit or loss =

Decision:

b) Will this firm produce in the short period if the productprice is $55? What will be thetotal profits or loss of the firm?

TR = TC = Profit or Loss =

Decision:

7

C) What will be the profit/loss of the firm if the productprice is $34? Will it be beneficial toshut down the production? Why?

TR = TC = Loss =

Decision: