(A) Complete the Following Table Note: Marginal Values Are Values Between Levels of Output

question 21

Essay

(a) Complete the following table: $$\begin{array} { | c | c | c | c | } \hline \text { P } & \text { Q } & \text { TR } & \text { MR } \\\hline \$ 10 & 1 & & \\\hline 9 & 2 & & \\\hline 8 & 3 & & \\\hline 7 & 4 & & \\\hline 6 & 5 & & \\\hline 5 & 6 & & \\\hline 4 & 7 & & \\\hline 3 & 8 & & \\\hline 2 & 9 & & \\\hline 1 & 10 & & \\\hline\end{array}$$ Note: Marginal values are values between levels of output.
(b) Suppose the firm's variable costs are as given in the accompanying table. What is the firm's profit-maximizing level of output? $$\begin{array} { | c | c | } \hline Q & V C \\\hline 1 & 5 \\\hline 2 & 9 \\\hline 3 & 12 \\\hline 4 & 16 \\\hline 5 & 21 \\\hline 6 & 27 \\\hline 7 & 34 \\\hline 8 & 42 \\\hline 9 & 51 \\\hline 10 & 61 \\\hline\end{array}$$ (c) What would the profit-maximizing output be if the government offered to pay the firm's variable costs of production?
(d) What would profit-maximizing output be if instead the government decided to levy a tax of $100 on the firm, independent of its output decision?
(e) Do we know whether the firm will exit the industry in the short run? How about in the long run? Why or why not?

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