In Table 20–1, the fixed cost is $15. Redo the table assuming the fixed cost is $35.

Table 20-1:

a. Does the change in fixed costs affect marginal cost?

b. Does it affect the optimal level of output (in the short run)?

Transcribed Image Text:

Table 20-1. Determining Profits with the Rule of Short-Run Supply Marginal Revenue (=P) Total Output Revenue $0 30 60 90 120 150 567G A WNIO 1 2 3 4 8 180 210 240 $30 30 30 30 30 30 30 30 MC $40 30 20 10 25 30 41 60 TVC $0 40 70 90 100 125 155 196 256 AVC - $40 35 30 25 25 25.83 28 32 TC $15 55 85 105 115 140 170 211 271 Profit -$15 - 25 - 25 - 15 5 10 10 - 1 - 31