Consider a competitive firm that produces tomatoes. The total fixed costs are $10 and TVC is related to output according to the followin scheduele
Quantity TVC
0 0
1 45
2 85
3 120
4 150
5 170
1)Compute ATC and MC
2) What is quantity if P=40
3)what is quantity if P=30
4)What is profit if P=35
5)What is relationship between marginal costs and the firms supply curve?
Take a shot. What do you think.
Hints: The change in TVC is MC. The firm will maximize when P=MC