The table below shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Quantity 0 It must fall. 100 200 300 400 500 600 It must rise to offset the increased cost. Total Cost Variable Cost (dollars) (dollars) $1,000 $0 1,360 1,560 1,960 2,760 4,000 5,800 The firm will shut down. Suppose the fixed cost of production rises by $500 and the price per unit is still $8. What happens to the firm's profit-maximizing output level? It will remain the same. 360 560 960 1,760 3,000 4,800
The table below shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Quantity 0 It must fall. 100 200 300 400 500 600 It must rise to offset the increased cost. Total Cost Variable Cost (dollars) (dollars) $1,000 $0 1,360 1,560 1,960 2,760 4,000 5,800 The firm will shut down. Suppose the fixed cost of production rises by $500 and the price per unit is still $8. What happens to the firm's profit-maximizing output level? It will remain the same. 360 560 960 1,760 3,000 4,800
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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