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Sugar candy production Number of boxes Average cost per box 100 10.00 101 10.10 102 10.20 103 10.30 The current output level of the firm

Sugar candy production

Number of boxes Average cost per box

100 10.00

101 10.10

102 10.20

103 10.30

The current output level of the firm is 100 boxes of sugar candies per month. Then a new customer makes an offer to purchase a box of candies at $15.00. If the offer is accepted the firm has to increase its production to 101 boxes for the period.

Should the firm accept the offer?Explain using marginal analysis.

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