Paul runs a shop that sells printers. Paul is a perfect competitor and can sell each printer for a price of $300. The marginal cost of selling one printer a day is $200; the marginal cost of selling a second printer is $250; and the marginal cost of selling a third printer is $350. To maximize his profit, Paul should sell

Question

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To maximize profit, Paul should sell printers as long as the price ($300) is greater than or equal to the marginal cost. The marginal cost of the first printer is $200 and the second is $250, both less than $300. The marginal cost of the third printer is $350, which is more than $300, so he should not sell the third printer. Therefore, Paul should sell two printers a day.

Paul Runs a Shop That Sells Printers