Asked by
Omphemetse Masimong
on Dec 11, 2024
Verified
A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do?
A) Shut down.
B) Increase output.
C) Stay at its current output.
D) Decrease output.
E) Decrease price.
Marginal Cost
The cost of producing one additional unit of a good or service, often considered in decision-making about production levels.
Marginal Revenue
The additional income earned from selling one more unit of a good or service; it's a crucial concept for decision-making in businesses.
- Analyze situations to determine optimal output levels for price-taker firms.
- Utilize the principles of marginal revenue and marginal cost for decision-making processes in markets where firms are price takers.
Verified Answer
YB
Learning Objectives
- Analyze situations to determine optimal output levels for price-taker firms.
- Utilize the principles of marginal revenue and marginal cost for decision-making processes in markets where firms are price takers.