A Factory Produces a Product That Sells for $12

question 73

Short Answer

A factory produces a product that sells for $12. They currently produce 2200 items per month, at an average cost of $3 per item. The marginal cost at this level is $2. Assume that the factory can sell all the items that it produces.
A. What is the profit at this production level?
B. Would increasing production increase or decrease profit?

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Definitions:

Stated Purpose

The explicitly expressed aim or reason behind an action, study, or project.

Memory Capacity

The amount of information that can be held in memory, either short-term, working, or long-term memory.

Speed

The rate at which someone or something moves or operates or is able to move or operate.

Fluid Intelligence

The ability to solve novel reasoning problems and think logically in new situations, independent of acquired knowledge.