Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the table below. $$\begin{array} { | c | c | }
\hline \begin{array} { c }
\text { Number of } \
\text { Mugs Per Day }
\end{array} & \begin{array} { c }
\text { Total Cost } \
\text { Per Day }
\end{array} \
\hline 0 & \$ 10 \
\hline 1 & \$ 14 \
\hline 2 & \$ 19 \
\hline 3 & \$ 25 \
\hline 4 & \$ 32 \
\hline 5 & \$ 40 \
\hline 6 & \$ 49 \
\hline
\end{array}$$ If Chris's fixed costs decrease, then in the short run his profit-maximizing level of output will:

Question

Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the table below. $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Number of } \
\text { Mugs Per Day }
\end{array} & \begin{array} { c } 
\text { Total Cost } \
\text { Per Day }
\end{array} \
\hline 0 & \$ 10 \
\hline 1 & \$ 14 \
\hline 2 & \$ 19 \
\hline 3 & \$ 25 \
\hline 4 & \$ 32 \
\hline 5 & \$ 40 \
\hline 6 & \$ 49 \
\hline
\end{array}$$ If Chris's fixed costs decrease, then in the short run his profit-maximizing level of output will:

Quizplus · Accepted Answer

In the short run, Chris's fixed costs cannot be changed, as they are costs that do not vary with the level of output. Therefore, any changes in his fixed costs would not affect his profit-maximizing level of output. Chris's profit-maximizing level of output is determined by comparing his marginal cost to his marginal revenue, and this decision is not affected by changes in his fixed costs. Therefore, his profit-maximizing level of output will not change if his fixed costs decrease.

Suppose Chris Is a Potter Who Makes Mugs If Chris's Fixed Costs Decrease, Then in the Short Run