A Company Produces at an Output Level Where Marginal Cost

question 53

Multiple Choice

A company produces at an output level where marginal cost is equal to marginal revenue and has the following revenue and cost levels:
Total revenue = $1,450
Total cost = $1,500
Total variable cost = $1,300
What would you suggest?

• A) shut down
• B) continue to produce because the loss is less than the total fixed cost
• C) increase production to lower the marginal cost
• D) reduce output to lower the marginal cost
• E) raise the price

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Definitions:

Authority

The authority or ability to issue commands, make judgments, and ensure compliance.

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The practice of demonstrating politeness, respect, and consideration for others during phone conversations.

Pitch

A presentation or proposal aimed at persuading or informing an audience, often used in sales or marketing contexts.

Inflection

The modulation of the voice to express meaning, emotion, or emphasis in spoken language.