Question: Pricing products or services can be a difficult task in the market. If a company prices the product too high it will sit on shelves,
Pricing products or services can be a difficult task in the market. If a company prices the product too high it will sit on shelves, while pricing a product too low will result in shortages. Both of these scenarios lead to lower profits. From the perspective of this course, we know that a firm should produce until marginal revenue equals marginal cost. Therefore, as long as the additional revenue from the last product is greater than the additional cost, continue to produce
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