XTC Ltd has total costs of $45,000 and it is currently producing 5,000 units. It has examined its cost structure and has found that, of its variable costs, half vary in a linear relationship with output; the other variable costs increase by $1 for every 1,000-unit increase in output. Fixed costs are $10,000, and these determine the capacity of 6,000 units. The market price is $10.

Required:

a. Determine the MC, AVC and ATC functions for the firm.

b. Determine the current profit of the company.

c. Determine the degree of operating leverage at current output.