Refer to Figure 13-3. Assume that EBP can sell as many as 1,000 sinks and 500 tubs per year. How many tubs should EBP produce?
A) 1,000
B) 500
C) 410
D) 675
E) 0

Question

Quizplus · Accepted Answer

To determine the optimal production quantities, we need to find the point where the marginal revenue equals the marginal cost for each product. Looking at the graph, we see that this occurs at a quantity of 590 for sinks and 410 for tubs. Therefore, EBP should produce 410 tubs.