2. (5 points) Figure 6.1(an example of the calculations required to fill out this table are in your textbook
Output
tables/day Total cost Marginal Cost Average Total Cost
0 $250
1 260
2 280
3 315
4 370
5 470
6 650
A. In figure 6.1, what are the fixed costs of production? (hint: fixed costs are also known as “overhead.”)
B. In figure 6.1, assuming a perfectly competitive market, if the price of tables is $100, how many tables would this firm produce to maximize profit?
C. In table 6.1, assuming a perfectly competitive market, if the price is $100, and the firm is maximizing profits, what would be the profit the firm receives?
D. In table 6.1, assuming a perfectly competitive market, what would happen in this industry in the long run? Why?
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