Question

You have a factory that makes an odorless spray that repels pet fur (useful for clothing, carpets, and car interiors for pet owners). Your invention has a marginal cost of production of $12, and you sell the units for $19.95. You should increase production. continue producing at your current production level. decrease production. halt production for a few weeks.

Answer 1

You should increase production.

Step-by-step explanation:

According to microeconomic theory, the equilibrium point for production is where the value of marginal cost equals the price. While the marginal cost be less than price, is accurate to say that cost productions are not being minimized. This minimization of cost is reach exactly when the marginal cost equals the price.