The table below shows the cost and revenue for a perfectly competitive firm The

The table below shows the cost and revenue for a

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The table below shows the cost and revenue for a perfectly competitive firm. The average revenue is fixed at RM12 per unit. Quantity (unit) Total Variable Cost (TVC) Total Cost (TC) Marginal Cost (MC) Total Revenue (TR) Marginal Revenue (MR) 0 12 1 22 2 28 3 33 4 40 5 52 6 72 a) Complete the table above. b) Determine the profit maximizing output. c) Calculate the amount of profit the firm is earning at equilibrium. State the amount of profit. d) How much is the total fixed cost for the above firm? e) At equilibrium, calculate: i) Average cost (AC) ii) Average variable cost (AVC) f) Sketch a diagram to show the equilibrium position of the firm. 2. The diagram below refers to a perfectly competitive firm. Given the price in the market is RM20. Cost/revenue (RM) (i) (ii) (iii) 28 25 (iv) 16 20 55 60 70 Quantity (unit) Based on the diagram above, answer the following questions:
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a) Label the curves (i), (ii), (iii) and (iv). b) State the condition for profit maximization. c) To maximize profit, how much should the firm produce and at what price? d) Calculate the profit earned by the firm at equilibrium point. e) What type of profit is the firm earning? f) What is the optimum output? g) Is the firm operating in the short run or long run? Justify your answer. 3. Given the diagram below: Cost/revenue (RM) MC AC 14 AVC 10 AR=MR=P 7 9 10 12 Quantity (unit) a) What type of market is the firm operating in? Give a reason for your answer. b) Determine profit maximizing price and output. c) Calculate total fixed cost and total variable cost at equilibrium output. d) Determine type of profit earned at equilibrium. e) Should the firm continue or stop production in the short run? Explain.
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