Reference no: EM132488438

A firm in a perfectly competitive industry knows the following about its costs and revenue. The firm would like to maximize profit and has hired a consultant for advice.

Price           Q of Output              Total Revenue             Total Cost               Total Fixed Cost

8                 600                            TR?                           TC?                       4,000

Total Variable Cost          Average Total Cost          Average Variable Cost         MC                  

        7,400                                 ATC?                         AVC?                           9 

Part 1. Total Revenue is ____   

Part 2. Total Cost is ___  

Part 3: Average Total Cost is ___

Part 4. Average Variable Cost is ___ 

Part 5. What is the value of the profit or loss (-) at the current output (include the - sign if it's a loss)  

Part 6. Consultant's Advice:  As a consultant, what advice would you give to this firm: (Choose ONE answer from the following) 

1. Firm should do nothing; it is already profit maximizing/loss minimizing

2. Firm should reduce quantity of output

3. Firm should increase quantity of output

4. Firm should shutdown operations

5. The given number set is inconsistent