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A dairy farm faces a perfectly competitive market. It sells milk at $6 per liter. Complete...

A dairy farm faces a perfectly competitive market. It sells milk at $6 per liter. Complete the table below to answer the following questions.

Quantity of output (liter)

Total revenue

Marginal revenue

Total cost

Marginal cost

ATC

VC

AVC

0

3

1

5

2

8

3

12

4

17

5

23

6

30

7

38

8

47

a) Find the quantity of output that maximizes the profit for the firm. Also calculate the profit at that level.

b) Find out the break-even quantity for the firm.

c) Find out the shutdown point for the firm.

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Expert Solution

Rahul Sunny answered 1 year ago
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