The table below shows the marginal cost (MC) for The Tea Shop, a perfectly competitive firm producing different quantities of tea. The market price of tea is $5.50 a box. Instructions: In part a, round your answers to two decimal places. In part b, enter your answer as a whole number. a. Complete the marginal revenue (MR) column in the table below. The Tea Shop's Costs and Revenues Marginal Cost Quantity (tea) 50 75 100 125 150 175 200 225 (dollars) $5.00 4.50 4.00 5.50 9.00 boxes 14.50 21.50 30.50 Marginal Revenue (dollars) $ b. At a market price of $5.50 per box of tea, how many boxes of tea should The Tea Shop supply? c. Suppose there is an increase in demand. The likely effect on the market will be [(Click to select) in the market price and (Click to select) in the quantity produced by The Tea Shop.

Quantity 10 20 30 40 Fixed Cost 200 200 200 200 Variable Cost 50 100 300 800 Total Cost 250 300 500 1000 Based on the aforementioned chart for a company that is perfectly competitive: A) Calculate the marginal cost using X B) Determine the quantity that will maximize profits if the equilibrium price is $20. C) What kind of profit will the company make? Marginal Cost 0 5 20 X

Suppose the market for apples is perfectly competitive. The short-run average total cost and marginal cost of growing apples for an individual grower are illustrated in the figure to the right. 40- 36 Assume that the market price for apples is $26.00 per box. What is the profit-maximizing quantity for apple growers to produce? 75 boxes. (Enter your response as an integer.) 32 MC 28 At this level of output, profit will be S 900. (Enter your response rounded to the nearest dollar.) Apple growers will earn positive economic profit in the short run at any market price above $ per box. (Enter your response rounded to one decimal 20- place.) ATO 12- 20 30 40 so 80 70 ao 90 100 Output (boxes of apples per day) (xoq jəd sejop) so

The graph shows a firm in a perfectly competitive market making a profit. The graph includes the firm's marginal cost curve, average total cost curve, and average variable cost curve. Assume the market price is $28. 1.) Use the line drawing tool to graph the firm's demand curve. Label this line 'Demand'. 2.) Use the point drawing tool to plot the firm's profit-maximizing price and quantity. Label this point 'Point A'. 3.) Use the rectangle drawing tool to shade in the firm's profit (Profit/Loss). Properly label this shaded area. Carefully follow the instructions above, and only draw the required objects. Price and cost 48- MC 44- 40- 36- 32- ATC 28- AVC 24- 20- 16- 12- 8- 4- Quantity

The following graph illustrates the demand and marginal revenue curve (D=MR) of a perfectly competitive firm. Suppose that when the firm produces 70 units, its average variable cost equals $30 per unit and its average total cost equals $55 per unit. Use the green rectangle (triangle symbols) to plot the total cost of producing 70 units. Next, use the grey rectangle (star symbols) to plot the total variable cost of producing 70 units. Then, use the tan rectangle (dash symbols) to plot the total revenue at 70 units. Finally, use the purple rectangle (diamond symbols) to plot the profit or loss at 70 units. PRICE AND COST (Dollars) 100 90 80 70 60 50 40 30 20 10 0 O 10 20 30 40 50 60 QUANTITY (Units) +ATC + AVC 70 D=MR 80 90 100 Total Cost Total Variable Cost Total Revenue Profit or Loss ?

The following graph illustrates the demand and marginal revenue curve (D-MR) of a perfectly competitive firm. Suppose that when the firm produces 40 units, its average variable cost equals $65 per unit and its average total cost equals $80 per unit. Use the green rectangle (triangle symbols) to plot the total cost of producing 40 units. Next, use the grey rectangle (star symbols) to plot the total variable cost of producing 40 units. Then, use the tan rectangle (dash symbols) to plot the total revenue at 40 units. Finally, use the purple rectangle (diamond symbols) to plot the profit or loss at 40 units. PRICE AND COST (Dollars) 100 90 80 70 60 50 40 30 20 10 0 0 10 + 20 +ATC + AVC 30 40 50 60 QUANTITY (Units) 70 80 D=MR 90 H 100 Total Cost Total Variable Cost I Total Revenue Profit or Loss ?

Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 MC 80 70 60 ATC 40 30 AVC 20 10 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of bushels) COST (Cents per bushel)

a.Suppose a perfectly competitive firm can produce10000 bushels of corn a year at an output at which marginal revenue is equal to marginal cost. The market price of corn per bushel is $2. The firm's total costs per year are $30000 and fixed costs per year are $15000. Show and explain which of the following is true: In the short run, this firm should a) Produce 20000 bushels to try to increase economic profit. b) Produce 10000 bushels of corn because, although they are losing money, they are losing less than if they shut down. c)Shut down. d) Continue producing until the price of corn increases.       b.A perfectly competitive firm, with MC=q operates in a market character,zed by the following market demand and supply conditions: Demand: Q=20000-100P Supply: Q=100P   How much output does this competitive firm produce to maximize profit? Show your work graphically and algebraically.

Suppose the market for peaches is perfectly competitive. The short-run average total cost and marginal cost of growing peaches for an individual grower are illustrated in the figure to the right. Assume that the market price for peaches is $30.00 per box. What is the profit-maximizing quantity for peach growers to produce? boxes. (Enter your response as an integer.) At this level of output, profit will be $. (Enter your response rounded to the nearest dollar.) Peach growers will earn positive economic profit in the short run at any market price above $ per box. (Enter your response rounded to one decimal place.) Price (dollars per box) 40- 36- 32- 28- 24 20 16- 12- 8 4- 10 MC 20 30 40 50 60 70 80 Output (boxes of peaches per day) ▬▬ ATC 90 100 Q

Please show what areas of the graph should be shaded. Thank you so much