Question: Consider a perfectly competitive firm with the following short-run cost functions.

Assume that the market price is $1.50.

1. Will the firm produce output or shut down? Why?
2. If the firm will produce output, approximately how many units will the firm produce?
3. Approximately how much profit/loss will the firm earn/incur?
4. In the figure above, draw the firm's demand curve.
   Now, assume that the market price is $0.70.
5. Will the firm produce output or shut down? Why?
6. If the firm will produce output, approximately how many units will the firm produce?
7. Approximately how much profit/loss will the firm earn/incur?
   Now, assume that the market price is $2.60.
8. Will the firm produce output or shut down? Why?
9. If the firm will produce output, approximately how many units will the firm produce?
10. Approximately how much profit/loss will the firm earn/incur?

Price: $2.99

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Deliverable: Word Document