Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the table below.
![1014_number of mugs.png](https://secure.tutorsglobe.com/CMSImages/1014_number of mugs.png)
a. Compute the marginal cost if the 4th mug per day.
b. If the market for mugs is perfectly competitive, and mugs sell for $7.50 each, then how many Chris should produce per day?
c. Compute fixed costs, total cost, and average variable costs for this production level.
d. Compute his economic profit/loss at p=$7.50.
e. At $7.50 per mug, should he expand his operation, continue operation, or shut down?