1. Suppose a perfectly competitive firm in the short-run is
currently producing an output level of 50,000 units, charging a
price per unit of $4. The firm incurs variable costs of $280,000 in
producing this level of output. It also has fixed costs
of $60,000.
a) Calculate the economic profit (or loss) from the firm
producing and selling these 50,000 units of output.
b) Calculate the economic profit (or loss) from the
firm shutting down and producing zero units.
c) Given the correct...