Suppose that initially the data in Problem 24-17 apply, but then an increase in fixed costs occurs.

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Suppose that initially the data in Problem 24-17 apply, but then an increase in fixed costs occurs. As a result, the ATC curve in Figure 24-6 shifts upward. Consequently, the average total cost of producing 9.5 units of output rises to $5 per unit. Does the monopolist's profit-maximizing weekly output rise, fall, or remain the same? What is the new amount of maximized weekly economic profits?

Problem 24-17

Take a look at Figure 24-6. Suppose that Q1, is 9.5 units per week, that P, is $6.10 per unit, and that the average total cost of producing the 9.5 units is $4.26 per unit. What is the dollar amount of maximized monopoly profits displayed by the green area?image text in transcribed

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