Use the following graph to answer the questions that follow. (22 points) Price/Costs $22 $17 $12 96 $8 $5 Quantity a. Identify the top curve. For full credit, how do you know? (5 Points) b. Is the firm depicted by the cost curves above operating in the short-run or long-run? Briefly articulate your answer. For full points, you must provide an explanation. (5 points) c. Why are both of these curves U-shaped? (6 points) d. Tell me everything you know about this firm if the going price is $12. (6 points) Please number ypur answers according to the number or letter provided in each question.

(1) Use the graph to answer the question below. The quantity is measured in thousands of units. What will this firm decide to do in the long run? A-It will stay in the market because the price is above its AVC at its profit-maximizing output.  B-It will leave the market because the price is below its ATC at its profit-maximizing output. C-It will increase its price to point B to earn normal profit. D-It will increase its output until its profit-maximizing output level is equal to B. E-Insufficient data to determine.   (2) A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do?  A-Produce more milk.  B-Produce less milk.  C-Shut down in the short run.  D-Operate in the short run and leave the industry in the long run.  E-Insufficient information to determine (3) A firm operating in a perfectly competitive market cannot…

CENGAGE MINDTAP Homework (Ch 07) 2. Short-run cost formulas Douglas Fur is a small manufacturer of fake-fur boots in New York City. The following table shows the company's total cost of production at various production quantities. Fill in the remaining cells of the table. Total Product Total Cost Marginal Cost Total Fixed Cost Total Variable Cost Average Variable Cost Average Total Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 120 200 2 240 285 4 340 425 6. 540 On the following graph, plot Douglas Fur's average total cost curve (ATC) using the green points (triangle symbol). Next, plot its average variable cost curve (AVC) using the purple points (diamond symbol). Finally, plot its marginal cost curve (MC) using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer: For example, the average total cost of producing one pair of boots is $200, so you should start your average total cost curve by placing a…

The following is a total cost curve. Total cost ($) 1000 900+ 800- 700- 600- 500- 400- 300- 200- 100- 04 50 TC 100 150 200 250 300 350 Quantity (q) Q On the diagram to the right, sketch the corresponding marginal cost curve. Using the multipoint curved line drawing tool, draw the firm's marginal cost curve. Label this curve 'MC'. Note: Use the multipoint curved line drawing tool one time to draw the entire curve. Marginal cost per unit ($) 10.00 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00 0.00+ 0 50 100 150 200 250 Quantity (q) 300 350 Q After plotting the final point of your multipoint curve, press the Esc key on your keyboard to end your curve.