53) Refer to Table 12-1. 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? A) It must fall. C) The firm will shut down. B) It must rise to offset the increased cost. D) It will remain the same. 53)

If the short-run marginal costs of producing a good are $30 for the first 500 units and $40 for each additional unit beyond 500, then in the short run, if the market price of output is $31, a profit-maximizing firm will produce as much output as possible since there are constant returns to scale. produce up to the point where average costs equal $31. produce exactly 500 units. not produce at all, since marginal costs are increasing. produce a level of output where its revenue equals marginal costs.

PROBLEM (4) The market for plastic toys is perfectly competitive, and it is composed of many identical firms, each with the total cost function TC(q) = ½ q² + 40q + 2,450 (a) What is the short run shut down price and the long run entry/exit price for this market? (b) Carefully draw the short run supply graph of an individual firm, and separately the long run aggregate (market) supply graph for this industry. (c) What is the optimal quantity to produce for the firm and the corresponding net profit, if the market price is (i) %3D $30? (ii) $70? Now, suppose in addition that the market demand is Q = 18,000 - 100p. (d) In the long run equilibrium, what is the market price and quantity? How many units does each firm in the market produce, and what is its net profit? How many firms are there in the long run equilibrium? (e) Suppose the government imposes a $14 per unit tax on plastic toys. Re-answer part (d) %3D

Managers of perfectly competitive firms must be cautious when deciding to permanently expand (or contract) the scale of production. What factors should go into the decision to expand the scale of production if the market price of your product increases? (select all that apply)   A. Whether your product has a complement in consumption   B. If the scale expansion is appropriate and not in excess   C. If other firms are likely to enter the market   D. Whether the price change is temporary or permanent