Question 2

ABC Cottage is a small resort in Northern B.C. and that resorts are a perfectly competitive industry. Quantity of rooms (Q) Total Fixed Cost (TFC) Total Variable Cost (TVC) Total Costs (TC) Average Fixed Costs (AFC) Average Variable Costs (AVC) Average Total Costs (ATC) Marginal Cost (MC) 0 1080 - - - - 1 400 400 2 965 450 3 2430 4 1900 475 5 2500 216 6 700 a. Complete the table above. b. If the price is $520, how many rooms will ABC Cottage offer? Explain your answer. c. Calculate ABC Cottage's profit (or loss).