Figure 1 shows the short­run cost curves of a toy producer. The market has 1,000 identical producers and Table 1 shows the market demand schedule for toys.

1. At a market price of $21 a toy, what quantity does the firm produce in the short run and does the firm make a positive economic profit, a zero economic profit, or an economic loss?

2. At a market price of $12 a toy, how many toys does the firm produce and what is its economic profit in the short run? How will the number of firms in the market change in the long run?

3. At what market prices would the firm shut down temporarily? What is the market price of a toy in long­run equilibrium? How many firms will be in the toy market in the long run? Explain your answer.

Bade, Robin; Parkin, Michael (2014-02-26). Foundations of Microeconomics (7th Edition) (Page 397). Prentice Hall. Kindle Edition.