Assume that the following conditions exist for a perfectly competitive firm: price = $10, current output = 100 units/hour, ATC at current output = $9.00, AVC at current output = $8.00 and MC at current output = $8.00.

a. Is the firm earning any economic profit currently? How much is its profit or loss?
b. Is the firm maximizing its economic profit? How do you know? What should the firm do to maximize profit? Should it increase or decrease output?
c. Given your answers in part b, how will the market adjust to reach long-run equilibrium? What will happen to the economic profit in the long-run? Include appropriate graphs for the market and the typical firm in your explanation.

Analyzing operational changes operating results for department b of delta company during 2016 are as follows: sales $540,000 cost of goods sold 378,000 gross profit 162,000 direct expenses 120,000 common expenses 66,000 total expenses 186,000 net loss $(24,000) suppose that department b could increase physical volume of product sold by 10% if it spent an additional $18,000 on advertising while leaving selling prices unchanged. what effect would this have on the department's net income or net loss? (ignore income tax in your calculations.) use a negative sign to indicate a net loss answer; otherwise do not use negative signs with your answers. sales $answer cost of goods sold answer gross profit answer direct expenses answer common expenses answer total expenses answer net income (loss) $answer