Questions 11.2 The dog food market is a purely competitive market. A firm producing dog food has an output of 10,000 pounds of dog food, for which it sells for $0.50 a pound. At the output level of 10,000 pounds the average variable cost is $0.30, the average total cost is $0.70, and the marginal cost is $0.50. Is this firm maximizing short-run profits? Explain. Calculate the profit or loss. What will happen in the long run? Explain