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### According to the table below, Note that output levels are calibrated.pdf

1. According to the table below, *Note that output levels are calibrated in hundreds in this example; that's why we have divided the change in total costs and revenues from one output level to another by 100 to calculate marginal revenue and marginal cost. Very few manufacturers deal in units of 1. (a) What were the fixed costs of production for the firm? Instructions: Enter your response as a whole number. \$ (b) At what rate of output was profit per computer maximized? (Choose the highest output level.) computers per month (c) At what output rate was total profit maximized? (Choose the highest output level.) computers per month Solution a. at zero level of output cost = \$60,000 and it is only the fixed cost that incurs at zero level of output. So, Fixed cost = \$60000 b. at 400 level of production Total profit = \$160000 So, profit per computer = 160000/400 = \$400 and it is the maximum profit per computer that can be earned. c. Profit maximization happens when Marginal revenue = Marginal cost and above condition holds true at the production level of 600 outputs. total profit earned at this level of 600 output = \$180000
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