The market price for wallets is $20. Your technology is such that at your most efficient production point, the average total cost of producing a wallet is $2.50. Your manager runs into your office and shouts, "Boss!!! Average costs are rising!! Average costs are rising!!" To make a profit-maximizing decision, you should:

Question

Quizplus · Accepted Answer

To make a profit-maximizing decision, you need to consider the marginal cost of producing one additional unit. Therefore, asking the manager about the marginal cost will provide necessary information for making a decision.

The Market Price for Wallets Is $20