Suppose That Cheapo Industries,a Perfectly Competitive Firm,currently Produces 500 Units

question 28

Multiple Choice

Suppose that Cheapo Industries,a perfectly competitive firm,currently produces 500 units of imitation ham spread for a total cost of $1,500.The marginal cost of the 500^th unit is $20,and the marginal revenue of the 500^th unit is $15.To maximize profits,Cheapo Industries should:

• A)continue to produce 500 units.
• B)produce more than 500 units but less than 1500 units.
• C)produce less than 500 units.
• D)produce more than 1500 units.
• E)stop producing at 500 units.

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