If the short-run marginal costs of producing a good are $30 for the first 500 units and $40 for each additional unit beyond 500, then in the short run, if the market price of output is $31, a profit-maximizing firm will produce as much output as possible since there are constant returns to scale. produce up to the point where average costs equal $31. produce exactly 500 units. not produce at all, since marginal costs are increasing. produce a level of output where its revenue equals marginal costs.

If the short-run marginal costs of producing a good are $30 for the first 500 units and $40 for each additional unit beyond 500, then in the short run, if the market price of output is $31, a profit-maximizing firm will produce as much output as possible since there are constant returns to scale. produce up to the point where average costs equal $31. produce exactly 500 units. not produce at all, since marginal costs are increasing. produce a level of output where its revenue equals marginal costs.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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