Show all the necessary steps and$/$or reasoning that lead to your answers. No credits will be given to answers without necessary steps and$/$or reasoning.

$1.$ Cost figures for a hypothetical firm are given in the following table. Use them for the exercises below. The firm is selling in a perfectly competitive market.

Output Fixed AFC Variable AVC Total ATC MC

Cost Cost cost

$1$ $$50$  $$30$

$2$ $$50$  $$50$

$3$ $$50$  $$80$

$4$ $$50$  $$120$

$5$ $$50$  $$170$

a$.$ Fill in the blank columns

b$.$ What is the minimum price needed by the firm to break even?

c$.$ What is the shut down price?

d$.$ At a price of $$40,$ what output level would the firm produce? What would its profits be$?$

$2.$ What can you expect from an industry in perfect competition in the long run? That is$,$ what will the price be$?$ What quantity will be produced? What will be the relation between marginal cost, average cost, and price?