Mohamed produces Toys in the perfectly competitive Toys market.
- Fill in the missing values in the following table: (5 marks)
| Output per week | Total Cost | FC | VC | AFC | AVC | ATC | MC |
| 0 | $100 | ||||||
| 1 | 150 | ||||||
| 2 | 175 | ||||||
| 3 | 190 | ||||||
| 4 | 210 | ||||||
| 5 | 240 | ||||||
| 6 | 280 | ||||||
| 7 | 330 | ||||||
| 8 | 390 | ||||||
| 9 | 460 | ||||||
| 10 | 540 |
- Suppose the equilibrium price in the Toys market is $30. How many Toys should Mohamed produce? How much profit will he make? (1 mark)
- If next week the equilibrium price of Toys drops to $15, should Mohamed shut down? Explain. (1 mark)