Answer the next questions on the basis of the following cost data for a firm in pure competition:
OUTPUT ------ TFC ---------- TVC
0 $100.00 0.00
1 100.00 70.00
2 100.00 120.00
3 100.00 150.00
4 100.00 220.00
5 100.00 300.00
6 100.00 390.00
If the product price is $75, at its optimal output,
a) Will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be?
b) If the product price is $100, at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.