Suppose that the additional revenue that comes from the 100th unit is $5, and the marginal cost of the 100th unit is $4.9. Which of the following is the best strategy for a perfectly competitive firm? Group of answer choices a)the firm should not produce the 100th unit because the additional profit from the 100th unit is $0.1  b)the firm must increase production since marginal revenue is greater than marginal cost. c) the firm must decrease production because marginal cost will decrease with production. d)the firm should not increase production since the opportunity cost of the 100th unit is higher than the additional revenue.

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter7: Perefect Competition
Section: Chapter Questions
Problem 5SQP
icon
Related questions
Question
Hide student question Time Left : Suppose that the additional revenue that comes from the 100th unit is $5, and the marginal cost of the 100th unit is $4.9. Which of the following is the best strategy for a perfectly competitive firm? Group of answer choices a)the firm should not produce the 100th unit because the additional profit from the 100th unit is $0.1  b)the firm must increase production since marginal revenue is greater than marginal cost. c) the firm must decrease production because marginal cost will decrease with production. d)the firm should not increase production since the opportunity cost of the 100th unit is higher than the additional revenue.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Multiplicative Exponential demand Model
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Survey Of Economics
Survey Of Economics
Economics
ISBN:
9781337111522
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Microeconomics A Contemporary Intro
Microeconomics A Contemporary Intro
Economics
ISBN:
9781285635101
Author:
MCEACHERN
Publisher:
Cengage
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning