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Homework Help: Struggling in econ

  1. Jun 9, 2004 #1
    :confused: Suppose a firm in a perfectly competive industry is producing a output of 10 units. The firms total revenue at this output is $80 and its total cost is $30. The firms marginal cost associated with the 11 unit of a output is $12. What can i say about an increase in production should it produce 11 unit or no

    this is what i have
    output TC MC
    10 $30 $3 per unit
    11 $42 $12 per unit

    profit is $50

    @10 units = 30/10 = $3
    @11 unit = 42/11 = $3.80

    it should not increase production because the cost more per unit to make

    did i go about this right?
    thanks joe
     
  2. jcsd
  3. Jun 9, 2004 #2

    AKG

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    Science Advisor
    Homework Helper

    I'm not sure, but I think it would depend on the marginal revenue (if there is such a thing) associated with the 11th unit. And is profit/unit of real concern, or net profit? I would think it would be profit. Of course, if this is a homework question, it really depends on what your teacher expects and has taught you.
     
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