You\'re thinking of buying one of two firms. One has a profit margin of $6 per u

Question

You're thinking of buying one of two firms. One has a profit margin of $6 per unit; the other has a profit margin of $8 per unit. Which should you buy? Why? If both firms are producing where MR = MC and you could buy either for the same amount, then you should buy the firm: That has a profit margin of $8 per unit because it must be producing more and is therefore earning the higher earning the higher total profits. That has a profit margin of $6 per unit because it must be producing more and is therefore earning the higher total profits. that has a profit margin of $8 per unit. A higher profit margin means that you could increase output and further increase total profits. With the higher total profit. This means that you don't have enough information to determine which firm to buy.

Explanation / Answer

Ans: with the higher total profit. This means that you don't have enough information to determine which firm to buy.

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.