Thomas Edison once said that he began making real profit on light bulbs when he dumped his surplus on the European market at less than the "cost of production." From this we can deduce Edison
A)did not want to maximize profit.
B)understood the difference between marginal and average cost.
C)had a different definition of the term "profit."
D)did not understand the difference between fixed and variable cost.

Question

Quizplus · Accepted Answer

Edison's statement suggests that he was aware of the concept of marginal cost (the cost of producing one additional unit) and understood that he could still make a profit by selling his surplus at a price that was lower than the average cost of production for all the units he produced. This implies that he understood the importance of considering both marginal and average cost in setting prices and maximizing profit.

Thomas Edison Once Said That He Began Making Real Profit