Pat's pizza is a prince taker. It has the following hourly costs:
OUTPUT: (PIZZA PER HOUR): 0,1,2,3,4,5,6
TOTAL COST: (DOLLAR PER HOUR): 10,21,30,41,54,69,86
a) If pizzas sell for $14, what is Pat's profit-maximizing output per hour? What is her profit (or loss?
b) What is Pat's shutdown point? (Hint: how low can Pat's price get before is shuts down?)
c) Graph Pat's MR, MC, ATC on the same diagram.
d) What price will cause other firms with costs identical to Pat's to enter the industry?