Larry’s Linens produces white cloth napkins for restaurants in a perfectly competitive market. The table in the next column shows output and total costs for one day of production.a. Complete the cost schedule for this firm by calculating TC, MC, ATC, and AVC. Remember to record the MC figures between the rows of output and total cost.b. Draw a scale diagram and plot ATC, AVC, and MC.c. Below which price should this firm choose to produce zero output?d. If the market price per napkin is $0.80, what is this firm’s profit-maximizing level of output? Since MC is calculated between the rows of the output levels given, state the range of output in which the profit-maximizing level of output will fall. Do the same for market prices of $0.60 and $1.00.e. Calculate the firm’s profit per unit and total profit per day at an output level of 450 napkins and at a market price of $0.70.
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