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Production, Costs, Revenues, and Profit
Worksheet
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Economics & Financial Literacy
12.17 Production, Costs, Revenues, and Profit
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A firm lowers price from $30 to $28 and sales rise from 100 units to 130 units. Total cost for the extra 30 units is $600. Should the firm make the price change?
A
Yes, because marginal cost is greater than marginal revenue
B
Yes, because marginal revenue per extra unit is about $21.33 and exceeds marginal cost of $20
C
No, because the price falls by $2
D
No, because total revenue must fall when price falls
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