A firm asks for your help in the analysis of some production decisions. The firm would like to know whether its decision to increase total production from 6,000 to 8,000 units was a wise move. It is revealed that at 6,000 units produced, the production costs for the firm totaled 58,000. At 8,000 units produced, production costs now total 85,000. You have performed additional research and discovered that each unit that the firm produced sold for an average of 10 per unit. If the firm wants to maximize profits, should it continue production at this level?
No, because marginal cost is now greater than marginal revenue. THIS ONE
Yes, because marginal cost is now greater than marginal revenue.
No, because marginal cost is now less than marginal revenue.
Yes, because marginal cost is now less than marginal revenue.