If a firm is willing to supply the 1,000th unit of a good at a price of $23 or more, we know that $23 is the
A) average price of all the prices the seller could charge.
B) highest price the seller hopes to realise for this output.
C) price that sets the marginal benefit equal to the price.
D) minimum price the seller must receive to produce this unit.
E) only price for which the seller is willing to sell this unit of the good.

Question

Quizplus · Accepted Answer

The statement indicates that $23 is the lowest price at which the seller is willing to supply the 1,000th unit, making it the minimum price necessary to cover the cost of producing that unit. This aligns with the concept of marginal cost, where the cost of producing one additional unit must be met or exceeded by the price for the firm to be willing to produce it.

If a Firm Is Willing to Supply the 1,000th Unit