The table below shows the cost information for a perfectly competitive firm.

Output Total Cost (TC) Marginal Cost (MC)

(units) (RM) (RM)

0 50 -

1 80

2 100 20

3 118

4 134

5 152

6 172

7 202

8 262

9 362

(a) What is the fixed cost for this firm?

(b) Compute marginal cost (MC) for each level of output.

(c) If the firm is able to sell all of its output at a fixed price of RM60 per unit, how

many units should it sell in order to maximise its profit and how much will its

profit be?

(d) If the fixed price falls to RM16 per unit, do you think the firm should shut

down in the short run? Explain.