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26 August, 09:14

For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units.

a. 3,000 units at which MC = $10 and MB = $13.

b. 11 units at which MC = $4 and MB = $3.

c. 43,277 units at which MC = $99 and MB = $99.

d. 82 units at which MC < MB

e. 5 units at which MB < MC

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  1. 26 August, 09:29
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    In relation to the business decision of making more or less dependent on Marginal Benefit or Marginal Cost, then the general rule is the marginal benefit represents the extra profit you make from producing more goods, while marginal cost is the expense you incur for producing more goods.

    Therefore, For each of the following situations involving marginal cost (MC) and marginal benefit (MB), it would be best to produce:

    a. 3,000 units at which MC = $10 and MB = $13. Produce more because extra profit you make from producing more goods is higher than the cost

    b. 11 units at which MC = $4 and MB = $3. Produce fewer because extra profit you make from producing more goods is lower than the cost

    c. 43,277 units at which MC = $99 and MB = $99. Produce fewer because extra profit you make from producing more goods is equal to the cost, increasing the number of units will not increase profits

    d. 82 units at which MC < MB. Produce more because extra profit you make from producing more goods is higher than the cost

    e. 5 units at which MB < MC. Produce fewer because extra profit you make from producing more goods is lower than the cost
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Home » Business » For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units. a. 3,000 units at which MC = $10 and MB = $13. b.
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