A Firm Operates in a Competitive Industry, in Which the Price

Essay

A firm operates in a competitive industry, in which the price is $8 per unit. Its fixed cost is $10 and its variable costs are given in the table. Compute the firm's revenues and costs for output over the range 0 to 8 units. Determine the profit-maximizing level of output for the firm. If this firm is typical of the industry, will entry occur? Explain why or why not.
$\begin{array} { | c | c | } \hline \text { Output } & \text { Variable cost } \\\hline 1 & 2 \\\hline 2 & 3 \\\hline 3 & 5 \\\hline 4 & 10 \\\hline 5 & 16 \\\hline 6 & 24 \\\hline 7 & 35 \\\hline 8 & 48 \\\hline\end{array}$