Table 12-1 Table 12-1 Shows the Short-Run Cost Data of a Perfectly

question 215

Multiple Choice

Table 12-1

Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units.
-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.
• B)It must rise to offset the increased cost.
• C)It will remain the same.
• D)The firm will shut down.

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Definitions:

Gross Pay

The total amount of money earned by an employee before any deductions or taxes are taken out.

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A document issued by an employer to an employee for rendered services, representing wages or salary.

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Amounts subtracted from gross income to arrive at a lower taxable income, including expenses like mortgage interest, state taxes, or charitable donations on a tax return.

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