Suppose you own a taxi company in New York City. Assume further the taxi industry in NYC is described by a perfectly competitive market structure. Further, the cost structure your firm faces is described by the following equation:

TC = 40 + 6Q + Q^2

Where Q = the number of taxi trips. The market price your company faces is P = $40/trip. Note in this problem the taxi company is a price taker and thus takes the Price, P, as given information. They can sell all the trips they want to at P = $40. Remember TR = P*Q and Profit = = TR - TC.

Note that the profit maximizing rule is find the Q at which MR = MC where MR = dTR/dQ and MC = dTC/dQ.

a. What is the profit maximizing or loss minimizing number of trips, Q? Hint the profit maximizing output is where MR = MC. b. What is the Economic profit or loss you are making? c. What output level is the minimum point for Average Total Costs (ATC)? If you find it easier you can use Excel to answer this question. Show all the work though. d. What output level, Q, and price/trip, P, will economic profits be zero? Note Economic Profits are zero [ie. (Econ = 0)] when P = ATC. If you find it easier you can use Excel to answer this question. Show all the work though.