Suppose Ben owns a small company that makes kites. The market for kites is perfectly competitive, and kites sell for $25 each. Ben's total production costs vary depending on the number of kites he makes each day, as shown in the accompanying table. $$\begin{array} { | c | c | }
\hline \text { Number d kites Per Day } & \text { Tutal Cast Per Day (\$) } \
\hline 0 & 100 \
\hline 1 & 110 \
\hline 2 & 126 \
\hline 3 & 148 \
\hline 4 & 172 \
\hline 5 & 200 \
\hline 6 & 235 \
\hline
\end{array}$$
If Ben's fixed cost rises, then in the short run, his:

Question

Suppose Ben owns a small company that makes kites. The market for kites is perfectly competitive, and kites sell for $25 each. Ben's total production costs vary depending on the number of kites he makes each day, as shown in the accompanying table. $$\begin{array} { | c | c | } 
\hline \text { Number d kites Per Day } & \text { Tutal Cast Per Day (\$) } \
\hline 0 & 100 \
\hline 1 & 110 \
\hline 2 & 126 \
\hline 3 & 148 \
\hline 4 & 172 \
\hline 5 & 200 \
\hline 6 & 235 \
\hline
\end{array}$$  
If Ben's fixed cost rises, then in the short run, his:

Quizplus · Accepted Answer

Fixed costs do not affect the marginal cost of production, which is what determines the profit-maximizing level of output in the short run. Therefore, an increase in fixed costs does not change the quantity that maximizes profit.

Suppose Ben Owns a Small Company That Makes Kites If Ben's Fixed Cost Rises, Then in the Short Run