The graph depicts the short-run cost conditions facing a typical competitive firm.

The graph depicts the short-run cost conditions facing a typical competitive firm.

a. If the current market price is $3, find (show) in the graph the firm’s short-run profit-maximizing quantity (Q*) of output for the typical firm? Show all steps.

b. Explain how you determined Q* in the graph by completing the following:

At P = 3, Q* = _______ because

c. Calculate total profit (Π) at the current market price and the corresponding profit-maximizing quantity of output. (Show all formulas and all steps in your calculations.)

d. Suppose the market price changes to $2. Complete the following statement regarding the typical competitive firm’s short-run output decision:

At P = 2, the typical firm produces Q* = _______ because

A monopolist’s demand schedule:

a. What are the total revenue at each price level in the table?

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