anonymous
  • anonymous
a company producing computers computes its marginal profit as 300 - 0.2x dollars, where x is the number of computers sold per month. The company is currently producing and selling 1400 computers per month. Would it be wise to advise an increase in the production/sales to 1700 per month in order to register a gain total profits? Give reason for your answer.
Mathematics
chestercat
  • chestercat
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anonymous
  • anonymous
According to Wikipedia marginal profit should be zero: "Under the marginal approach to profit maximization, to maximize profits, a firm should continue to produce a good or service until marginal profit is zero" At 1700 units sold Marginal profit is negative, so I'm guessing no is the answer. This isn't really a math question. The answer depends on what some economics philosophy dictates, i.e. what your teacher says is right.

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