I am looking at #4c specifically—I did not think I could find the profits and producer surplus at the profit maximizing level of output without a specific marginal revenue value. Do you think the problem is referring to part 4b, where the marginal revenue is $900? Do you think it is merely asking for definitions?X AVCa) Draw out the short run supply curve for Omer’s firm.b) If the market price of the product is $5,000, what is the firm’s producer surplus? If the market priceof the product is $3,400, what is the firm’s producer surplus? If the market price is $1,700 what is thefirm’s producer surplus?c) Is producer surplus same as profit? Explain.4) Raquel runs a perfectly competitive firm selling cupcakes. Her firm has the following cost functions:Total cost: TC(q) = $10,000 + $100q + $10q2,Marginal cost: MC(q) = $100 + $20q, where q is the number of cupcakesa) What is the Average Total Cost, Average Fixed Costs and Average Variable Cost functions? Drawout the three curves along with the marginal cost curve on one graph.b) If Raquel’s firm faces a market price of $900 per unit, how much will she produce at the profitmaximizing point?c) In the short run, what are profits and producer surplus at the profit maximizing level of output?5) Jean- Baptiste makes homemade pastries. His fixed input in the short run is the mixer. In the long run,he can choose a spatula, hand mixer, or a stand mixer. The following table shows the short-run fixedcost (FC) and variable cost (VC) of weekly production using each different level of the capital input.FC ($)VC ($)FC ($)VC ($)FC ($)VC ($)Output ofI spatulaspatulahandhandstandstandpastriesmixermixermixermixermixermixer20020020020010040020020020080040020010050020001000200250
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