Q: In the model described in Q2, what is the best interpretation of the coefﬁcient 100?

or

Q: Which interpretation of the coefficient 100 in the model presented in Q2 is the most accurate?

- The variable costs are 100 USD
- The elasticity of cost respect to quantity is 100
**Fixed costs are 100,000 USD**- Fixed costs are 100 USD

**Explanation:** The coefficient **100** represents the fixed costs when the quantity produced ($q$) is zero. Therefore, the fixed costs in actual dollar amounts are $100×1,000=100,000$ USD.