ABC Company is currently producing 450 units of output. The output is sold in a perfectly competitive market at a price of $35 . The marginal cost of the 450th unit is $38
Is ABC Company producing at the profit-maximizing level of output? Explain.
No, ABC is not producing at the profit-maximizing level of output. The marginal cost of the 450th unit is greater than the marginal revenue the firm earns by selling that unit. Therefore, selling the 450th unit lowers profit.
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The social cost of cutting trees for firewood in a government forest is
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