Question

a company is producing 15,000 units. at this output level, mr is $22, and the mc is $18. the firm sells each unit for $48 and average total cost is $40. what can we conclude from this information? a company is producing 15,000 units. at this output level, mr is $22, and the mc is $18. the firm sells each unit for $48 and average total cost is $40. what can we conclude from this information? not enough information is provided to conclude that any of the other choices are correct. the company is making a loss. the company needs to cut production. the company needs to increase production.

Answer 1

The company is making a loss based on the provided information.

Step-by-step explanation:

Based on the provided information, we can conclude that the company is making a loss.

Here's why:

• The marginal cost (MC) of producing each additional unit is $18, while the selling price is $48. This means that the company's revenue from selling each additional unit (Marginal Revenue - MR) is less than the cost of producing it, resulting in a loss.
• The average total cost (ATC) is $40, which is higher than the selling price of $48. This further confirms that the company is making a loss.
• The MR is $22, which is also lower than the selling price of $48, indicating that the company is not maximizing its profits.