Question

is quantity and Using the data in the following table, show what happens to the firm's output choice and profit if the fixed cost of production increases from $100 to $150 to $170, where C is total cost. Assume that the price of output is $56. 9 MC C FC = $100) C (FC - $150) CFC = $170) 170 220 150 200 248 2448 269 262 280 300 322 22 250 272 310 38 355 405 10 55 410 475 460 525 the fixed cost of production is $100, then output will be units (enter your response using an integer) and profit will be fixed cost of production is $180, then output wil bo unts and profit will be $1 the red cost of production is $170, then output will be units and proto wa to $[] What general conclusions can you reach about the offects of feed cons on the soul The firm's output choice

Answer 1

When Fixed cost is $100,

Since price is $56, firm will produce until marginal cost is less than $56, hence output will be 10 units

Revenue=10*56=$560

Hence profit=560-410= $150

When Fixed cost is $150,

Since price is $56, firm will produce until marginal cost is less than $56, hence output will be 10 units

Revenue=10*56=$560

Hence profit=560-460= $100

When Fixed cost is $170,

Since price is $56, firm will produce until marginal cost is less than $56, hence output will be 10 units

Revenue=10*56=$560

Hence profit=560-480= $80

Hence it can be concluded that output doesn't change with fixed costs