Answer to Question #9690 in Microeconomics for Kathy E

Question

A. What is the most efficient point of production for a competitive firm? When a competitive firm decides to shut down? When does it decide to exit the market?
B. Suppose the following table shows cost measures of an Ice-Cream factory. Complete the table, and show these cost curves in a graph.
C. How many ice-creams will be produced when price is $3? At what market price this firm must shut down?

Quantity Variable Total Fixed Average Average Marginal
Costs Costs Costs Fixed Cost Variable Cost Cost
0 $10
1 $1
2 $3 $13
3 $6 $16
4 $10
5 $25
6 $21 $10