Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 3

Suppose that,due to a dramatic rise in real estate taxes,total fixed cost at Neds Beds rises from $300 to $1,300 per day. Use the data of Table 1 to answer the following:
a. What does the tax hike do to Ned's MC and MR curves?
b. In the short run,how many beds should Ned produce after the rise in taxes?
Table 1