Lauren’s Nail Salon (a perfectly competitive firm) faces costs of production as follows:
Q clients per week Total Revenue Total Cost Variable Cost Average Variable Cost Average Total Cost Marginal Revenue Marginal Cost Profit
0 $0 $100 $0
10 120 150 50
20 240 230 130
30 360 330 230
40 480 450 350
50 600 600 500
60 720 800 700
a. What are Lauren’s fixed costs?
b. Fill in the rest of the table
c. What is the profit-maximizing level of output?
d. Graph MC, AVC, ATC, and MR. Shade in the area that is her profit.
e. At what price will Lauren close her salon and exit the market?