1. Fit-To-A-Tee, a "price-taking" T-Shirt design shop, has a schedule of total fixed costs, total variable costs, total costs and marginal costs as shown in the table below:
(a) Copy and complete the table above by calculating various costs at every level of output the firm might produce.
(b) Graph AFC, AVC, ATC and MC.
(c) At a product price of $452, will this firm produce in the short run? If so, what quantity will they produce? Explain. What will its profit or loss be?
(d) At a product price of $173, will this firm produce in the short run? If so, what quantity will they produce? Explain. What will its profit or loss be?
(e) At a product price of $122, will this firm produce in the short run? If so, what quantity will they produce? Explain. What will its profit or loss be?
(f) In the table below, complete the supply schedule for this competitive firm.
(g) Suppose there are 100 identical firms in the industry and all have the same cost schedule, complete the market supply schedule in the table below (column 3).
(h) Suppose the market demand schedule is shown in the table above (column 1). What will be the equilibrium price and the equilibrium quantity of the product? What will the short-term profits of each firm be? Explain and show your work.