Suppose that a monopolistically competitive firm must build a production facility in order to produce a product. The fixed cost of this facility is FC = $24. Also, the firm has constant marginal cost, MC = $3. Demand for the product that the firm produces is given by P = 27- 3Q.
Fill in the entire table below. All of the numbers you fill in will be integers (no decimals), some have been added.
Quantity of Output Price Total Cost Average Total Cost Total Revenue Profits
1 2 3 4 5 7.8 6 7 6.4 8 9 5.7 B. How many units of output will the firm produce if it maximizes its profit?
C. What price should this firm charge if it wants to maximize its profit?
