The Metal Shop Produces 1

The Metal Shop produces 1.8 million metal fasteners a year for industrial use. At this level of production, its total fixed costs are $378,000 and its total costs are $522,000. The firm can increase its production by 5 percent, without increasing either its total fixed costs or its variable costs per unit. A customer has made a one-time offer for an additional 50,000 units at a price per unit of $0.10. Should the firm sell the additional units at the offered price? Why or why not?

A) yes; The offered price is less than the marginal cost.
B) yes; The offered price is equal to the marginal cost.
C) yes; The offered price is greater than the marginal cost.
D) no; The offered price is less than the marginal cost.
E) no; The offered price is greater than the marginal cost.