Question Help * Using the data in the following table, show what happens to the

Question

Question Help * 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 $120 to $140, where q is quantity and C is total cost. Assume that the price of output is $58 Exercise 2 C (FC = $140) C (FC = $120) 120 170 198 218 232 250 270 MC C (FC 100) 140 190 218 100 150 178 198 212 230 250 18 312 310 410 475 6 375 430 495 515 f the fixed cost of production is $100, then output will be units (enter your response using an integer)

Explanation / Answer

Answer

The firm produces at P=MC or the closet lower MC than P
where
Q=10
and the fixed cost does not affect the output decision of the firm because the profit is maximum at MC=P

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