1. Profit Maximization and Shutdown Point (numerical example) A group of economists surveyed small business firms in July 2020 to find out about their production decisions during the beginning of the pandemic. Suppose a small business from their survey has the following information on output and costs. Output q Total Cost Marginal Cost Total Revenue Marginal (a) (b) P=$14 Revenue 0 ها-ادابادام 2 3 4 5 10 21 30 41 54 69 Profit=TR- TC (d) a) Calculate the MC, TR and MR and profits in Table 1 if the firm's product is $14 per unit. b) Is the marginal revenue changing? What is the economic reason for your answer? c) Given the price is $14, how much q should a firm produce to maximizes profits? What is the economic reason a firm does not produce more units?

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