An American car manufacturer is currently charging a price of $60,000 and is selling 500 units of output per day. If the firm increases price above $60,000, then quantity demanded will decline by 30 units for every $100 increase in price. If the firm reduces price below $60,000, then the quantity demanded will increase by 15 units for every $100 decrease in price. If the automobile producer's marginal cost curve is horizontal, within what range could marginal cost vary without giving the firm an incentive to change price or quantity?

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The Answer of An American car manufacturer is currently charging a price of $60,000 and is selling 500 units of output per day. If the firm increases price above $60,000, then quantity demanded will decline by 30 units for every $100 increase in price. If the firm reduces price below $60,000, then the quantity demanded will increase by 15 units for every $100 decrease in price. If the automobile producer's marginal cost curve is horizontal, within what range could marginal cost vary without giving the firm an incentive to change price or quantity?

An American Car Manufacturer Is Currently Charging a Price of $60,000