The Following table shows total cost (TC) of a kid selling lemonade, where the lemonade market...

The Following table shows total cost (TC) of a kid selling lemonade, where the lemonade market is considered “Competitive” market. Answer all following questions:

Quantity of Output	Total Cost $
0	5
1	8.5
2	15
3	22
4	30.5
5	45.5

What are the conditions of Perfect Competition?
What does “Price Taker” mean?
If the market price is $8.50, what is the profit-maximizing output? Explain.
If the market price is $8.50, calculate the economic profit (loss)?

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Expert Solution

Rahul Sunny answered 10 months ago

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