Answer to Question #278768 in Economics for pau

Question

The Green Company produces chemicals in a perfectly competitive market.The current market price is 40, the firms total cost is C= 100+4Q+Q2

a. Complying with more stringent environmental regulations increases the firms fixed cost from 100 to 144.Would this affect the firms output? Its supply curve?

Answer 1

a. The increase in the firms fixed cost from 100 to 144 would not affect the firms output and its supply curve, because MC doesn't depend on the fixed costs.