A competitive firm currently produces and sells 500 units of output. Its total revenue is $6,000; the marginal cost of producing the 500^th unit of output is $14.50; and the average total cost of producing the 500^th unit of output is $9.50. Is the firm maximizing its profit, or should it increase or decrease output in order to increase its profit?

Question

Quizplus · Accepted Answer

The Answer of A competitive firm currently produces and sells 500 units of output. Its total revenue is $6,000; the marginal cost of producing the 500^th unit of output is $14.50; and the average total cost of producing the 500^th unit of output is $9.50. Is the firm maximizing its profit, or should it increase or decrease output in order to increase its profit?

A Competitive Firm Currently Produces and Sells 500 Units of Output