1. Is profit increasing or decreasing at 40 units produced and sold? Explain you
ID: 2867366 • Letter: 1
Question
1. Is profit increasing or decreasing at 40 units produced and sold? Explain your conclusion using marginal cost and marginal revenue.
2. Estimate a production level where average cost and marginal cost are equal.
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The graph to the right shows cost and revenue as functions of number of units of a product produced and sold. You need to decide which graph is the cost function and which graph is the revenue function.Explanation / Answer
Total revenue is illustrated as an upward-sloping straight line hence the line goes up staright and then curve is a revenue function,the slope of the total revenue function is a constant and corresponds to the market-determined price.
for cost -Total cost has two components
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