1. A compnay that manufactures and sells ballet slippers is currently producing
ID: 2867386 • Letter: 1
Question
1. A compnay that manufactures and sells ballet slippers is currently producing and selling 1200 pairs of slippers each month at an average cost of $4 per pair. At that production level, marginal cost is $5 per pai. Each pair of slippers produced is sold for $20.
a. At that level of production and sales, how much profit or loss is the business experiencing? Is profit increasing or decreasing at that level?
b. At that level of production and sales, is average cost increasing or decreasing? Explain you contention.
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Explanation / Answer
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