Question 1:

Part B:

Part B; Suppose you are thinking about starting a Food delivery service in your area. The food delivery service market can be considered perfectly competitive. You have a fixed cost of $90 (maintenance costs and a selling price of $35 only etc.). Your variable costs are as follows: # of Total Fixed Total Average Average Marginal Lawns Variable Cost Costs Total Variable Costs Mowed Costs Costs Costs $5 90 95 95 5 5 2 $15 90 105 52.5 7.5 10 3 $30 90 120 40 10 15 4 $50 90 140 35 12.50 20 5 $75 90 165 33 15 25 6 $105 90 195 32.5 17.5 30 7 $140 90 230 32.8 20 35 8 $180 90 270 33.75 22.5 40 $225 90 315 35 25 45 10 $275 90 365 36.5 27.5 50 Use the table and calculate: a) The firm's supernormal profit if any? b) What is the best size of production for the firm? c) Plot the graph for all three cases to show the normal profit, supernormal profit and the loss if any. d) What is Shutdown? Calculate if it exist for this problem. e) Where is the Equilibrium point of this firm or how many units shall the firm produce to get into equilibrium and why