Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing


  • one year ago

Suppose you are a competitive firm producing computer memory chips. Your production capacity is 1000 units per year. You marginal cost is $10 per chip up to capacity. You have a fixed cost of $10,000. What are your profit-maximizing levels of production and profit if the market price is a) $5 per chip, b) $15 per chip, and c) $25 per chip? For case b), explain why production is positive even though profits are negative.

  • This Question is Open

    Not the answer you are looking for?
    Search for more explanations.

    • Attachments:

Ask your own question

Sign Up
Find more explanations on OpenStudy
Privacy Policy