Suppose worthington farms a perfectly competitive firm is

Question

Suppose Worthington Farms, a perfectly competitive firm is faced with the following relationship between Total Cost and the Quantity of Strawberries

Quantity                 Total Cost ($)

0                                 50

1                                100

2                                130

3                                140

4                                160

5                                190

6                                230

7                                280

Based on the above table, answer the following questions:

1. What's the profit maximizing level of output if the market price is $30, and $45? Why?
2. What is the lowest price Worthington Farms could receive for its output without earning below-normal profits?
3. What is the lowest price the perfectly Worthington Farms could receive for its output without shutting down production?
4. Should this firm advertise to increase sales? Why or why not? Explain