A firm's variable cost is VC(Q)=4Q2. All of the fixed cost is sunk. Suppose the market price is $24. When the fixed cost increases from $5 to $15, how does the profit-maximizing quantity and profit change? The profit-maximizing quantity does not change; profit does not change. The profit-maximizing quantity decreases; profit does not change. The profit-maximizing quantity does not change; profit decreases from $31 to $21. The profit-maximizing quantity decreases; profit decreases from $31 to $21.

A firm's variable cost is VC(Q)=4Q2. All of the fixed cost is sunk. Suppose the market price is $24. When the fixed cost increases from $5 to $15, how does the profit-maximizing quantity and profit change? The profit-maximizing quantity does not change; profit does not change. The profit-maximizing quantity decreases; profit does not change. The profit-maximizing quantity does not change; profit decreases from $31 to $21. The profit-maximizing quantity decreases; profit decreases from $31 to $21.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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