1. Suppose that a perfectly competitive firm has the following total variable costs (TVC): Quantity (Q) 0 1 2 3 4 5 6 TVC $0 $6 $11 $15 $18 $22 $28 It also has total fixed costs (TFC) of $6. If the market price is $5 per unit: a. Find the firm’s profit-maximizing quantity using the marginal revenue and marginal cost approach. (10 points) b. Check your results by re-solving the problem using the total revenue and total cost approach. If the firm earning a positive or negative profit? (10 points)
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