Firm operate in perfectly competitive market as price taker

Question

Problem 1:

Quantity	Price	Marginal Revenue	Average Fixed Cost	Average Variable Cost	Average Total Cost	Marginal Cost
0	152
1	142	142	100.00	138.30	238.30	138.30
2	132	122	50.00	124.20	174.20	110.10
3	122	102	33.33	112.70	146.03	89.70
4	112	82	25.00	103.80	128.80	77.10
5	102	62	20.00	97.50	117.50	72.30
6	92	42	16.67	93.80	110.47	75.30
7	82	22	14.29	92.70	106.99	86.10
8	72	2	12.50	94.20	106.70	104.70
9	62	-18	11.11	98.30	109.41	131.10
10	52	-38	10.00	105.00	115.00	165.30

Assuming this firm is a short-run profit-maximizer or loss-minimizer. which statement best describes its present situation?

• It should shut dowm immediately.
• It is incurring a loss but should continue operating in the short run.
• It is earning only a normal profit.
• It is earning above normal profit.
• Insufficient data to answer this question.

Problem 2:

Quantity	Price	Marginal Revenue	Average Fixed Cost	Average Variable Cost	Average Total Cost	Marginal Cost
0	152
1	142	142	100.00	138.30	238.30	138.30
2	132	122	50.00	124.20	174.20	110.10
3	122	102	33.33	112.70	146.03	89.70
4	112	82	25.00	103.80	128.80	77.10
5	102	62	20.00	97.50	117.50	72.30
6	92	42	16.67	93.80	110.47	75.30
7	82	22	14.29	92.70	106.99	86.10
8	72	2	12.50	94.20	106.70	104.70
9	62	-18	11.11	98.30	109.41	131.10
10	52	-38	10.00	105.00	115.00	165.30

Supose this firm is operating in a perfectly competitive market as price taker. If the market price is $90, in the short run, this firm should:

• produce 8 units of output.
• produce 9 units of output.
• produce 7 units of output.
• produce 0 units of output (i.e., shut down).
• insufficient information to answer this question.

Problem 3:

Quantity	Price	Marginal Revenue	Average Fixed Cost	Average Variable Cost	Average Total Cost	Marginal Cost
0	152
1	142	142	100.00	138.30	238.30	138.30
2	132	122	50.00	124.20	174.20	110.10
3	122	102	33.33	112.70	146.03	89.70
4	112	82	25.00	103.80	128.80	77.10
5	102	62	20.00	97.50	117.50	72.30
6	92	42	16.67	93.80	110.47	75.30
7	82	22	14.29	92.70	106.99	86.10
8	72	2	12.50	94.20	106.70	104.70
9	62	-18	11.11	98.30	109.41	131.10
10	52	-38	10.00	105.00	115.00	165.30

If the firm is a price-taker (operates in a perfectly competitive market), it would be earning an economic profit as long as the market price is greater than

• $72.30.
• $106.70.
• $92.70.
• Insufficient information to answer this question.