Asked by
Fernanda Fernandez
on Nov 04, 2024
Verified
Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. It follows that producing one more robot will cause this firm's
A) total cost to decrease.
B) profits to increase.
C) profits to decrease.
D) profits to remain unchanged.
Marginal Cost
The increase in total cost that arises from producing one additional unit of a good or service, a critical concept in economic analysis for decision-making.
Selling Price
The amount for which a product or service is sold to the customer.
- Understand the concept of marginal cost and how it affects firm's decision-making in a perfectly competitive market.
- Analyze the profits maximization condition in a perfectly competitive market.
Verified Answer
AM
Learning Objectives
- Understand the concept of marginal cost and how it affects firm's decision-making in a perfectly competitive market.
- Analyze the profits maximization condition in a perfectly competitive market.