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Why Would the Owner of the Following Company Decide NOT

Question 74

Multiple Choice

Why would the owner of the following company decide NOT to produce and sell the fourth unit, even though it adds less to costs than the price he could get for it?
 Quantity  Price  Total  revenue  Total cost  Marginal  revenue  Marginal  cost 1$300$300$100$300$1002$250$500$200$200$1003$200$600$300$100$1004$150$600$400$0$100\begin{array} { | l | l | l | l | l | l | } \hline \text { Quantity } & \text { Price } & \begin{array} { l } \text { Total } \\\text { revenue }\end{array} & \text { Total cost } & \begin{array} { l } \text { Marginal } \\\text { revenue }\end{array} & \begin{array} { l } \text { Marginal } \\\text { cost }\end{array} \\\hline 1 & \$ 300 & \$ 300 & \$ 100 & \$ 300 & \$ 100 \\\hline 2 & \$ 250 & \$ 500 & \$ 200 & \$ 200 & \$ 100 \\\hline 3 & \$ 200 & \$ 600 & \$ 300 & \$ 100 & \$ 100 \\\hline 4 & \$ 150 & \$ 600 & \$ 400 & \$ 0 & \$ 100 \\\hline\end{array}


A) It would add no additional revenue even though it sells for $150.
B) It has a price that is less than cost per unit of output.
C) It has marginal cost that is less than its marginal revenue.
D) It is associated with an increase in cost per unit.

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