Raiman's Shoe Repair produces custom-made shoes. When Mr. Raiman produces 12 pairs per week, the marginal cost of the 12th pair is $84, and the marginal revenue of the 12th pair is $70. What would you advise Mr. Raiman to do?

Question

Quizplus · Accepted Answer

When the marginal cost ($84) exceeds the marginal revenue ($70), it indicates that producing the 12th pair is not profitable. Therefore, Mr. Raiman should produce fewer custom-made shoes to avoid losses.

Raiman's Shoe Repair Produces Custom-Made Shoes