Table 10.1
$\begin{array}{|c|c|c|}
\hline \text { Quantity } & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} \
\hline 0 & \$ 1,000 & \$ 0 \
\hline 100 & 1,360 & 360 \
\hline 200 & 1,560 & 560 \
\hline 300 & 1,960 & 960 \
\hline 400 & 2,760 & 1,760 \
\hline 500 & 4,000 & 3,000 \
\hline 600 & 5,800 & 4,800 \
\hline
\end{array}$
Table 10.1 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 10.1.What is the fixed cost of production?

Question

Table 10.1
 $\begin{array}{|c|c|c|}
\hline \text { Quantity } & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} \
\hline 0 & \$ 1,000 & \$ 0 \
\hline 100 & 1,360 & 360 \
\hline 200 & 1,560 & 560 \
\hline 300 & 1,960 & 960 \
\hline 400 & 2,760 & 1,760 \
\hline 500 & 4,000 & 3,000 \
\hline 600 & 5,800 & 4,800 \
\hline
\end{array}$ 
Table 10.1 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 10.1.What is the fixed cost of production?

Quizplus · Accepted Answer

Fixed cost is the portion of total cost that does not change with changes in output. In this case, when output is 0, the total cost is $1,000, and when output is 100, the variable cost is $360. Therefore, the fixed cost must be $1,000 - $360 = $640. Option C is the correct answer.
 
The best choice is C, because it provides the correct calculation for finding the fixed cost, which is $640. Option A is incorrect because it implies that the fixed cost is $0, which is not true. Option B is incorrect because it only gives an alternative value for the variable cost, without addressing the fixed cost component. Option D is incorrect because the fixed cost can be determined using the information provided in the table.

Table 101 Table 101 Shows the Short-Run Cost Data of a Perfectly Competitive