Question

Which of the following are correct about fixed costs? (i) They do not change with the level of production in the short run. (ii) They include variable costs. (iii) They are present even when the firm is producing zero units. (iv) They are irrelevant to marginal cost. (ii) and (iv) (i), (ii), and (iii) O (i), (ii), (iii), and (iv) (i), (iii), and (iv)

Answer 1

① Ans: (i), (ii) and (io) -> (?v) Fixed costs are errelevant to margin- al cost because change in fexed costs does not affect man marginal Cost

sola - producer I inereare in quanlity supplied when price rises from $6-25 to $6.50= price Qs 138 6.25 6.50 172 172-138 34 (in they sand * .. change in supply - Similarly, producers 2 price as 6.25 120 6.50 150 in supply = 150-120=30(in thou send] chang producer, 3 price os 140 6.25 6.50 188 ... - Change in supply = 188-140= 48 (in thousand

producer 4 prcie os 6.25 180 6.50 220 =ro-180 Change in supply = 40 (in thousand) Now Add all the change in supply quantity to find out the Change in market 34+30+48+40 = 152 (in thousand supply = - 152000 Here, The quanlity supplied in the mark- et rises by 152,000 Aus

♡ thing being price falls 3 Aus: olen, Ren and Jen. The law of supply states that other equal if the the quanto ty supplied muu ist be rise and we can see the table, where only Len, Ren and Jen is able to follow the law of vice-versa. 2 of supply