Exhibit 7-3 Cost per unit curves

In Exhibit 7-3, if the price of the firm's product is $2.00 per unit, the firm will produce:

Question

Exhibit 7-3 Cost per unit curves

In Exhibit 7-3, if the price of the firm's product is $2.00 per unit, the firm will produce:

Quizplus · Accepted Answer

At a price of $2.00 per unit, the firm will produce where the marginal cost curve intersects the price curve, which is at 15 units per day. At this production level, the cost per unit is $1.50, which is lower than the price, allowing the firm to earn a profit. At any production level above 15 units per day, the cost per unit will be higher than the price, resulting in losses for the firm.

Exhibit 7-3 Cost Per Unit Curves