Question: Why is marginal cost the relevant cost to consider when a producer is deciding whether to produce more or less of a product?

Why is marginal cost the relevant cost to consider when a producer is deciding whether to produce more or less of a product?

Step by Step Solution

★★★★★

3.34 Rating (151 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Marginal cost is the additional cost of increasing output by one unit That ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Microeconomics Questions!

Q:

Does a monopolistic competitor produce more or less output as compared to an efficient level of production? Explain. What are the benefits and drawbacks of this? Should the government intervene to...

Q:

Why is that when Marginal Product declines, Marginal Cost increases? Why do firms in a perfectly competitive market earn zero profit in the long-run?

Q:

When deciding on whether or not to crash project activities, a project manager was faced with the following information. Activities of the critical path are highlighted with an asterisk: a. Identify...

Q:

All i need are the answers All i need are the answers All i need are the answers All i need are the answers All i need are the answers All i need are the answers 1. Lampshire Inc. is considering...

Q:

Appalachian Trail Continental Divide Trail Mountain to Sea Trail Sales $ 7 0 0 , 0 0 0 $ 4 5 0 , 0 0 0 $ 5 0 0 , 0 0 0 Variable manufacturing and selling expenses 5 0 0 , 0 0 0 3 2 5 , 0 0 0 3 9 0 ,...

Q:

8. A producer is deciding whether they should produce corn or not. Based on the budget below, what should the producer do? Calculate TR, TVC, TFC, TC, AVC, AFC, ATC below for one acre of corn. (Each...

Q:

Summarise this article for presentation How to Stop Customers from Fixating on Price At a consumer products company we're familiar with, no one on the senior team would ever refer to the company's...

Q:

PGA Tour, Inc. v. Martin, 532 U.S. 661 (ccu.edu) found in Nexis Uni, case. Jennings, M. (2016). Foundations of legal environment (3rd ed.). Chapter 18: Business and Employees - Employment Regulation...

Q:

kindly asking for help with the attached case report, I need help with calculations and abrief summary from A toE, just calculations,statistics and summary NOT a full report CASE REPORT It's now...

Q:

The Matisse Co. is contemplating investing in several major asset purchases. The data below has been presented for one of the proposed investment projects. Cost of equipment $50,000 Working capital...

Q:

If the cost price of 16 pens is equal to the selling price of 12 pens, what is the gain percent?

Q:

What are the four primary elements of the database environment?

Q:

Assume a bank offers an effective annual rate of 6 . 3 2 % . If compounding is monthly what is the APR? Answer format: Percentage Round to: 4 decimal places ( Example: 9 . 2 4 3 4 % , % sign...

Q:

1. All languages contain terms for black and white.

Q:

With import tariffs, the domestic price of goods is _________ than the world price.

Q:

Tariffs bring about _________ prices and revenues to domestic producers, _________ sales and revenues to foreign producers, and _________ prices to domestic consumers.

Q:

A(n) _________ is a tax on imported goods.

Q:

Question 6 (2pt) Consider the following multifactor (APT) model of security returns for a particular stock. 2 1. If T-bills currently offer a 6% yield, find the expected rate of return on this stock...

Q:

**Please solve this with an equation** running the lottery, the payment in year 18 , and only 18 , is not $200 but $0. Using an interest rate of 9%, determine the present value of this cash flow...

Q:

i need explanation for the answer and how we got 303520 44. Charni Chemical Company is considering purchasing an equipment which has an initial investment of Rs. 500000 which has a useful life of 4...