While a firm produces 200 units, the total cost of production is $ 4000. When they increase the output to 220, the cost increases to $ 4200. When the firm produces zero output, the cost is $ 1000. a) What is the fixed cost per unit when they produce 200 units? (ans: $5) b) How much sales would they have to sell at a selling price of $ 10 to make a profit of $ 1000?

While a firm produces 200 units, the total cost of production is $ 4000. When they increase the output to 220, the cost increases to $ 4200. When the firm produces zero output, the cost is $ 1000. a) What is the fixed cost per unit when they produce 200 units? (ans: $5) b) How much sales would they have to sell at a selling price of $ 10 to make a profit of $ 1000?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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