1. Tina decides to be an entrepreneur in Thunder bay, Ontario. She loves cooking so he decides to open a new restaurant. She produces only one main dish, which requires a building and a kitchen equipment. She rents a building for $30,000 per month and rents the equipment for $20,000 a month. Those are his fixed costs. Her variable cost per month is given in the table below.

Quantity	Variable cost ($)
0	0
1,000	5,000
2,000	8,000
3,000	9,000
4,000	14,000
5,000	20,000
6,000	33,000
7,000	49,000
8,000	72,000
9,000	99,000
10,000	150,000

1. Calculate Tinas average variable cost, average total cost, and marginal cost for each quantity of output.

Quantity	Variable cost ($)	Marginal cost ($) per unit	Average variable cost ($)	Average total cost ($)
0	0
1,000	5,000
2,000	8,000
3,000	9,000
4,000	14,000
5,000	20,000
6,000	33,000
7,000	49,000
8,000	72,000
9,000	99,000
10,000	150,000

2. There is free entry into the industry, and anyone who enters will face the same costs as Tina. Suppose that currently the price of a main dish is $25. What will Tinas profits be? Is this a long-run equilibrium? If not, what will the price of the main dish be in the long run? Also, what is Tinas break-even price? What is her shut-down price?

1. 4. Suppose the price of the main dish is $2. What should Tina do in the short run? Suppose the price of the main dish is $7. What is the profit-maximizing quantity of the dish that Tina should produce? What will his total profit be? Will he produce or shut down in the short run? Will she stay in the industry or exit in the long run?
2. 5. Suppose instead that the price of the dish is $20. Now what is the profit-maximizing quantity of the dish that Tina should produce? What will his total profit be now? Will she produce or shut down in the short run? Will she stay in the industry or exit in the long run?