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.What is the fixed cost of production?
A)$0
B)$500
C)$1,000
D)It cannot be determined.

Question

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.What is the fixed cost of production?
A)$0 
B)$500 
C)$1,000 
D)It cannot be determined.

Quizplus · Accepted Answer

Fixed costs are constant costs that do not vary with the quantity of output produced. From the table, we see that when zero units are produced (Q=0), the total cost is $1,000. Hence, $1,000 is the fixed cost of production. Option C is the correct choice.

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