The information below applies to a competitive firm that sells its output for $45 per unit. When the firm produces and sells 100 units of output, its average total cost is $24.5.When the firm produces and sells 101 units of output, its average total cost is $24.65. Suppose the firm is currently producing and selling 100 units of output. Should the firm increase its output to 101 units? a. Yes, because the marginal revenue exceeds the marginal cost. b. Yes, because the marginal revenue exceeds the average total cost c. No, because the marginal cost exceeds the marginal revenue. d. No, because the average total cost exceeds the marginal revenue.
The information below applies to a competitive firm that sells its output for $45 per unit. When the firm produces and sells 100 units of output, its average total cost is $24.5.When the firm produces and sells 101 units of output, its average total cost is $24.65. Suppose the firm is currently producing and selling 100 units of output. Should the firm increase its output to 101 units? a. Yes, because the marginal revenue exceeds the marginal cost. b. Yes, because the marginal revenue exceeds the average total cost c. No, because the marginal cost exceeds the marginal revenue. d. No, because the average total cost exceeds the marginal revenue.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter9: Market Structure And Long-run Equilibrium
Section: Chapter Questions
Problem 1MC
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The information below applies to a competitive firm that sells its output for $45 per unit.
When the firm produces and sells 100 units of output, its average total cost is $24.5.When the firm produces and sells 101 units of output, its average total cost is $24.65. Suppose the firm is currently producing and selling 100 units of output. Should the firm increase its output to 101 units?
a. Yes, because the marginal revenue exceeds the marginal cost.
b. Yes, because the marginal revenue exceeds the average total cost
c. No, because the marginal cost exceeds the marginal revenue.
d. No, because the average total cost exceeds the marginal revenue.
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