Price MC(q)=3+2g 10- 0 P=9.00 2 1 2 3 4 Quantity Suppose that the average variable cost of the firm is given by AVC(=3+q that the firm's fixed costs ar earning a positive,negative,or zero profit in the short Will the firm be Profit is equal to total revenue minus total ost.Total cost is equal to total variable cost plus fixed cost.Total variable cost is equal to (AVC)(q).Therefre,at q=3. TVC=3+33)=$18. Fixed cost is equal to $3.Therefore,total costequals TVCplus TFC,or TC=18+3=$21. Total revenue is price times quantity: TR=(893)=$27. Profit is total revenue minus total cost: π=S27.S21=S6 Thefore,the firm is earning positive economic profits.More easily,you might recall that surplus mi producer surplus was $9 in part b,profit equals 9-3 or $6. 6.A firm produces a product in a competitive industry and has a total cost function TC=50+4g+2g2 and a marginal cost function MC=4+4g.At the given market price of $20,the firm is producing 5 units of output.Is the firm maximizing profit? What quantity of output should the firm produce in the long run?Price Quantity 1 2 3 4 5 6 7 8 9 10 1 2 3 4 MC(q) = 3 + 2q Producer’s Surplus P = $9.00 Producer c. Suppose that the average variable cost of the firm is given by AVC(q) = 3 + q. Suppose that the firm’s fixed costs are known to be $3. Will the firm be earning a positive, negative, or zero profit in the short run? Profit is equal to total revenue minus total cost. Total cost is equal to total variable cost plus fixed cost. Total variable cost is equal to (AVC)(q). Therefore, at q = 3, TVC = (3 + 3)(3) = $18. Fixed cost is equal to $3. Therefore, total cost equals TVC plus TFC, or TC = 18 + 3 = $21. Total revenue is price times quantity: TR = ($9)(3) = $27. Profit is total revenue minus total cost:  = $27 - $21 = $6. Therefore, the firm is earning positive economic profits. More easily, you might recall that profit equals producer surplus minus fixed cost. Since we found that producer surplus was $9 in part b, profit equals 9-3 or $6. 6. A firm produces a product in a competitive industry and has a total cost function  TC = 50 + 4q + 2q 2 and a marginal cost function  MC = 4 + 4q . At the given market price of $20, the firm is producing 5 units of output. Is the firm maximizing profit? What quantity of output should the firm produce in the long run?