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Werner & Sons is a manufacturer of three-ring binders operating in a perfectly competitive industry.

The table below shows the firm's cost schedule. Complete the table by filling in the blank cells.

Werner is selling in a perfectly competitive market at a price of $40. What is the profit-maximizing or loss-minimizing output

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Quantity (cases)	Variable Cost	Total Cost	Marginal Cost	Average Variable Cost	Average Total Cost
0	$0	$76
1	$30	$106	$30	$30	$106
2	$50	$126	$20	$25	$63
3	$58	$134	$8	$19.33	$44.67
4	$64	$140	$6	$16	$35
5	$84	$160	$20	$16.80	$32
6	$114	$190	$30	$19	$31.67
7	$150	$226	$36	$21.43	$32.29
8	$190	$266	$40	$$23.75	$33.25
9	$240	$316	$50	$26.67	$35.11

How did we arrive on the missing costs to fill-in the table?

Variable Costs = Total Costs - Fixed Costs. The fixed cost here is $76.

Marginal Costs = Total Costs when producing 2 units - Total costs when producing 1 unit.

Average Variable Costs = Variable Costs / Total Units.

Average Total Costs = Total Costs / Total Units.

a. Setting P = MC and by looking at the table, the profit-maximizing output is 8 units.

b. Profit/loss = (P-ATC)*Q = (40-33.25)*8 = 6.75*8 = $54.

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