Raiman's Shoe Repair also produces custom-made shoes.When Mr.Raiman produces 12 pairs a week,the marginal cost of the twelfth pair is $84,and the MR of that unit is $70.What would you advise Mr.Raiman to do?

Question

Quizplus · Accepted Answer

The marginal cost of producing the twelfth pair of shoes is higher than the marginal revenue obtained from selling that pair. This indicates that the business is experiencing diminishing returns and it would be optimal to produce fewer custom-made shoes to maximize profit.

Raiman's Shoe Repair Also Produces Custom-Made Shoes