(Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm. The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit. If the market price is $3, the firm will produce units of output per day. Price (per unit) MC ATC $3.00 -d 2.00 1.90 TI 1.00 100 250 300 400 Output (per pday) 400 100 300 250

Billy’s Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. What is the Total profit for Billy’s Bean Bag Emporium? Include in your answer your calculation

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QUESTION 20 Study the table below which represents the cost and price schedules facing a perfectly competitive firm that manufactures bulbs. Use this information to answer the question. Quantity of the product 0 1 2 3 4 Price per unit (R) 10 10 10 10 10 10 c) d) 38022222 Total revenue Total profit (R) -10 -9 -5 -6 Marginal cost (R) . 9 6 8 10 13 Average variable cost (R) 9,00 7,50 7,67 8,25 9,20 This perfectly competitive firm will produce a) 3 bulbs, since losses are minimised. b) 4 bulbs, but it will consider shutting down in the short run. 4 bulbs, since at this production level it earns normal profit. 4 bulbs and will stay in operation.