4. A printer paper manufacturer sells its highly standardized product in a perfectly competitive market, at a price of TL50 per box. The firm has a fixed cost of TL30. Fill in the following table and indicate the level of output that maximizes profit. Determine how the profit-maximizing choice of output would change if the fixed cost increased from TL40 to TL60? More generally, explain how the level of fixed cost affects the choice of output. Output (Units) 0 1 2 3 4 5 6 Total Revenue (TL/unit) Total Cost (TL/unit) Profit (TL) Marginal Revenue (TL/unit) Marginal Cost (TL/unit) 50 20 30 42 54 70

4. A printer paper manufacturer sells its highly standardized product in a perfectly competitive market, at a price of TL50 per box. The firm has a fixed cost of TL30. Fill in the following table and indicate the level of output that maximizes profit. Determine how the profit-maximizing choice of output would change if the fixed cost increased from TL40 to TL60? More generally, explain how the level of fixed cost affects the choice of output. Output (Units) 0 1 2 3 4 5 6 Total Revenue (TL/unit) Total Cost (TL/unit) Profit (TL) Marginal Revenue (TL/unit) Marginal Cost (TL/unit) 50 20 30 42 54 70

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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