The graph illustrates the marginal costs of a thermometer producer facing a constant selling price of $1.00 per thermometer. Suppose that to produce the level of output suggested by using marginal thinking analysis the thermometer producer incurs fixed costs of $20 and variable costs of $172. Would the producer maximize profits by producing at this level? a. Yes. Producers should always use "marginal thinking." b. Yes. Because revenues just cover total costs, the firm is breaking even. c. Yes. Because revenues exceed variable costs, the firm should produce at that level. d. No. Because revenues do not cover total costs, the firm should cease production. e. No. Because revenues do not cover variable costs, the firm should cease production. The graph illustrates the marginal costs of a thermometer producer facing a constant selling price of $1.00 per thermometer. 1.00 Marginal Cost Price Cost and Price ($) .50 60 100 120 Quantity of Thermometers Suppose that to produce the level of output suggested by using marginal thinking analysis the thermometer producer incurs fixed costs of $20 and variable costs of $172. Would the producer maximize profits by producing at this level? O a. Yes. Producers should always use "marginal thinking." O b. Yes. Because revenues just cover total costs, the firm is breaking even. O c. Yes. Because revenues exceed variable costs, the firm should produce at that level. O d. No. Because revenues do not cover total costs, the firm should cease production. O e. No. Because revenues do not cover variable costs, the firm should cease production.
The graph illustrates the marginal costs of a thermometer producer facing a constant selling price of $1.00 per thermometer. Suppose that to produce the level of output suggested by using marginal thinking analysis the thermometer producer incurs fixed costs of $20 and variable costs of $172. Would the producer maximize profits by producing at this level? a. Yes. Producers should always use "marginal thinking." b. Yes. Because revenues just cover total costs, the firm is breaking even. c. Yes. Because revenues exceed variable costs, the firm should produce at that level. d. No. Because revenues do not cover total costs, the firm should cease production. e. No. Because revenues do not cover variable costs, the firm should cease production. The graph illustrates the marginal costs of a thermometer producer facing a constant selling price of $1.00 per thermometer. 1.00 Marginal Cost Price Cost and Price ($) .50 60 100 120 Quantity of Thermometers Suppose that to produce the level of output suggested by using marginal thinking analysis the thermometer producer incurs fixed costs of $20 and variable costs of $172. Would the producer maximize profits by producing at this level? O a. Yes. Producers should always use "marginal thinking." O b. Yes. Because revenues just cover total costs, the firm is breaking even. O c. Yes. Because revenues exceed variable costs, the firm should produce at that level. O d. No. Because revenues do not cover total costs, the firm should cease production. O e. No. Because revenues do not cover variable costs, the firm should cease production.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:The graph illustrates the marginal costs of a
thermometer producer facing a constant selling price of
$1.00 per thermometer. Suppose that to produce the
level of output suggested by using marginal thinking
analysis the thermometer producer incurs fixed costs of
$20 and variable costs of $172. Would the producer
maximize profits by producing at this level? a. Yes.
Producers should always use "marginal thinking." b.
Yes. Because revenues just cover total costs, the firm is
breaking even. c. Yes. Because revenues exceed
variable costs, the firm should produce at that level. d.
No. Because revenues do not cover total costs, the firm
should cease production. e. No. Because revenues do
not cover variable costs, the firm should cease
production.
The graph illustrates the marginal costs of a thermometer producer facing a constant selling price of $1.00 per
thermometer.
1.00
Marginal
Cost
Price
Cost and Price ($)
.50
60
100 120
Quantity of Thermometers
Suppose that to produce the level of output suggested by using marginal thinking analysis the thermometer
producer incurs fixed costs of $20 and variable costs of $172. Would the producer maximize profits by
producing at this level?
O a. Yes. Producers should always use "marginal thinking."
O b. Yes. Because revenues just cover total costs, the firm is breaking even.
O c. Yes. Because revenues exceed variable costs, the firm should produce at that level.
O d. No. Because revenues do not cover total costs, the firm should cease production.
O e. No. Because revenues do not cover variable costs, the firm should cease production.
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