Computer per hour 0 Fixed cost $150 Variable Total cost Cost $0 $150 Marginal Marginal Total Profit Cost Revenue Revenue --- $0 $0 $-150 1 150 38 188 $38 $175 175 -13 2 150 44 194 6 $175 350 156 3 150 49 199 5 $175 525 326 4 150 57 207 8 $175 700 493 5 150 69 219 12 $175 875 656 6 150 84 234 15 $175 1,050 816 1 Based on the chart above could this business continue to increase the number of computers produced per hour? Why? At what level of production do we see diminishing returns start?
Added by Patricia W.
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The marginal revenue is constant at $175, while the marginal cost increases, but remains below the marginal revenue until the production level exceeds 6 computers per hour. Show more…
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