You own a cigar company in Cuba. You produce 999 boxes of cigars per year. Your average costs per box is $1.00. Jean Chretien orders you $5.00 to produce an extra box so that he can give it to his best friend George W. Bush. If you accept his offer your average costs per box will be $1.01. Should you accept his offer and produce that extra box? Explain (with the relevant assumptions and numbers) why or why not.

Answer rating: 100% (QA)

No here is why Marginal cost MC is the additional cost incurred from producing one ... View the full answer