Scenario 13-3
Suppose a certain competitive firm is producing Q=500 units of output.The marginal cost of the 500th unit is $17,and the average total cost of producing 500 units is $12.The firm sells its output for $20.
-Refer to Scenario 13-3.If the marginal cost of producing the 501st unit would be $19,producing and selling the 501st unit would

Question

Quizplus · Accepted Answer

The firm sells each unit for $20, and the marginal cost of the 501st unit is $19. Therefore, producing and selling the 501st unit increases profit by $20 - $19 = $1.

Scenario 13-3 Suppose a Certain Competitive Firm Is Producing Q=500 Units of Units