The following information is relevant for an individual firmoperating in a perfectly competitive market.
| Output | 30 |
| Variable Cost | $800 |
| Fixed Cost | $1,200 |
| Marginal Cost | $60 |
| Price | $60 |
What will be the firm's production decision in theshort-run?
A fixed cost is a cost that:
exists only in the long-run.
does not vary with output.
changes based on the number of workers.
varies with output.
True or False:
A reason economies of scale exists is due to: Old tools andequipment can no longer be used.
Suppose you have the following information on a firm:
| Marginal Revenue | $240 |
| Marginal Cost | $250 |
Assume it is their goal to maximize profit.
| Marginal Revenue | $240 |
| Marginal Cost | $250 |
Decrease output to maximize profit.
Not enough iniformation to determine.
They are producing the profit maximizing level of output.
Increase output to maximize profit.
