Sconarlo $1-2$

Suppose a cigar manufacturer currently sells $1,500$ cigars per week and makes a profit of $$3,000$ per week. The plant foreman observes, "Although the last $500$ cigars we produced and sold increased our revenue by $$7,500$ and our costs by $$7,000,$ we are only making an overall profit of $$3,000$ per week so I think we need to cut back on production.

Rofor to Scenario $1-2.$ Had the firm not produced and sold the last $500$ cigars, would its profit be higher or lower, and if so by how much?

Its profit would be $$500$ lower:

Its profit would be $$1,500$ lower.

Its profit would be $$500$ higher.

Its profit would be $$1,000$ higher.