A factory produces a product that sells for $12. They currently produce 2200 items per month, at an average cost of $3 per item. The marginal cost at this level is $2. Assume that the factory can sell all the items that it produces.
A. What is the profit at this production level?
B. Would increasing production increase or decrease profit?

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The Answer of A factory produces a product that sells for $12. They currently produce 2200 items per month, at an average cost of $3 per item. The marginal cost at this level is $2. Assume that the factory can sell all the items that it produces.
A. What is the profit at this production level?
B. Would increasing production increase or decrease profit?

A Factory Produces a Product That Sells for $12