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Suppose Ben Owns a Small Company That Makes Kites If Ben's Fixed Cost Rises, Then in the Short Run

Question 25

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Suppose Ben owns a small company that makes kites. The market for kites is perfectly competitive, and kites sell for $25 each. Ben's total production costs vary depending on the number of kites he makes each day, as shown in the accompanying table.  Number d kites Per Day  Tutal Cast Per Day ($)  0100111021263148417252006235\begin{array} { | c | c | } \hline \text { Number d kites Per Day } & \text { Tutal Cast Per Day (\$) } \\\hline 0 & 100 \\\hline 1 & 110 \\\hline 2 & 126 \\\hline 3 & 148 \\\hline 4 & 172 \\\hline 5 & 200 \\\hline 6 & 235 \\\hline\end{array}  
If Ben's fixed cost rises, then in the short run, his:


A) profit-maximizing level of output will rise.
B) profit-maximizing level of output will fall.
C) profit-maximizing level of output will not change.
D) economic profit will not change.

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