Consider the following hourly demand and cost schedule for a purely competitive firm (T?, is Total Profit).

Q P TR MR TC TVC MC ATC AVC T?

0 $5.00 $4.00

1 4

2 2

3 1

4 2

5 3

6 4

7 5

8 6

9 7

10 8

11 9

12 10

13 11

a. Complete the columns pertaining to ATC, AVC, and MC as well as those for (TC), TVC, and TFC.

b. Draw the curves for Demand, TR, MR, ATC, AVC, and MC, all in one diagram. Also draw the Total Revenue (TR), Total Cost (TC), TVC, and TFC in a second diagram right below the first one.

c. Determine, in order for maximizing profit, (or minimizing, if that was the case) how many units this firm should produce and explain how you got your answer.

d. Demonstrate in BOTH diagrams (graphically and/or geometrically) the Total Coast, Total Variable Cost, Total Revenue , Total Fixed Cost and Total Profit, at the point where quantity produced is at the optima level (Profit-maximizing level).