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)

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)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

Question

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Table 12-1
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Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that
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Total Cost
(dollars)
$1,000
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1,560
1,960
2,760
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101 100
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