The information is for tape recorder erasers. President Nixon would like to purchase one of these from this company. To satisfy
this extra demand the firm would have to produce a 203rd unit, causing its ATC to move to $203. Nixon offers to pay $250 for the eraser. He really needs it badly. For purely economic reasons and not for fame, should the firm produce this 203rd unit and sell it for $250?
A) No, because TR < TC and the company's profits would decline
B) Yes, because the company's TR > TC with this offer
C) Yes, because the company's profits would be $47
D) No, because the company would lose about $155
E) No, because the ATC is rising which means it is producing beyond where MC = ATC
1 answer:
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After analyzing you question I have come to the conclusion that the answer is in-fact, Answer: D