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Suppose that the total fixed cost for a guitar manufacturer is $90. The marginal cost of the first guitar produced is $80 and decreases by

Supposethatthetotalfixedcostforaguitarmanufactureris$90.Themarginalcostofthefirstguitarproducedis$80anddecreasesby$10forthenextthreeguitarsproduce .Thereafter,themarginalcostincreasesby$10foreachsuccessiveguitar.

Refer to the information above to answer this question. If the manufacturer can sell her guitars for $70, how many should she produce in order to maximize her profits?

Multiple Choice

  • 5.
  • 8.
  • 7.
  • 0.
  • 6.

Supposethatthetotalfixedcostforaguitarmanufactureris$90.Themarginalcostofthefirstguitarproducedis$80anddecreasesby$10forthenextthreeguitarsproduce.Thereafter,themarginalcostincreasesby$10foreachsuccessiveguitar.

Refer to the information above to answer this question. If the manufacturer can sell her guitars for $70, what will be her profit or loss at the optimal output?

Multiple Choice

  • A loss of $50.
  • A loss of $90.
  • A loss of $60.
  • She will break even.
  • A profit of $50.

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