A firm has short-run costs given by: \[\begin{align*} C(q)&=q^2+1\\ MC(q)&=2q\\ \end{align*}\]

## 1.

Write an equation for fixed costs, \(f\).

## 2.

Write an equation for variable costs, \(VC(q)\).

## 3.

Write an equation for average fixed costs, \(AFC(q)\).

## 4.

Write an equation for average variable costs, \(AVC(q)\).

## 5.

Write an equation for average (total) costs, \(AC(q)\).

## 6.

Suppose the firm is in a competitive market, and the current market price is $4, how many units of output maximize profits?

## 7.

How much profit will this firm earn?

## 8.

Below what market price would the firm shut down in the short run if it were earning losses?

## 9.

At what market price would the firm break even \((\pi=0)\)?

## 10.

Write out the equation for the firm’s short run supply curve.