# 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. At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. ## A community for students. # 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.

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