1. The Abner Corporation, a retail seller of television sets, wants to determine how many television sets it must sell in order to earn a profit of $10,000 per month. The price of each television set is $300, the average variable cost is $100, and the fixed costs are $5,000 per month.

What is the required sales volume for Abner Corporation to earn a profit of $10,000 per month?

If the corporation were to sell each television set at $350 rather than $300, what would be the required sales volume?

If the price is $350 but the average variable cost decreased to $85 rather than $100, what would be the required sales volume now?

2. The Richardson Manufacturing Company's short-run average cost function is estimated as

            AC = 3 + 4 Q,

where AC is the firm's average cost (in dollars per pound of the product) and Q is the output.

Obtain an equation for the firm's short-run total cost function.

Does the firm have any fixed costs? Explain.

If the price of the company's product (per pound) is $3, is the firm making profits or losses? Explain.

Derive an equation for the firm's marginal cost function.