A monopolistically competitive firm faces the following demand and cost structure in the short run:
Output Price FC VC TC TR Profit/Loss
0 $100 $100 $0 - - -
1 90 - $50 - - -
2 80 - $90 - - -
3 70 - $150 - - -
4 60 - $230 - - -
5 50 - $330 - - -
6 40 - $450 - - -
7 30 - $590 - - -
a. Complete the table
b. Wht is the highest profit or lowest loss available to this firm?
c. Should this firm operate or shut down in the short run? why?
d. What is the relationship between marginal revenue and marginal cost as the firm increases output?