1. Given the following information:
Total Product (TP) Price Fixed Cost (TFC) Variable Cost (TVC)
0 $6000 $4000 $
1 6000 4000 7000
2 6000 4000 10000
3 6000 4000 12000
4 6000 4000 16000
5 6000 4000 22000
6 6000 4000 33000
a. At a quantity of 3, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (9 points)
b. At a quantity of 4, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (9 points)
c. At a quantity of 5, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (9 points)
d. At a quantity of 6, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (9 points)