At the current output level

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Your coffee mug company is currently producing at an output level of 200 units per month. Fixed costs are $500 per month. At the current output level, you know that marginal cost is $10 and equal to average total cost. At an output level of 150, you have determined that marginal cost would be $6 and equal to average variable cost. The market price of coffee mugs is $8. If your goal is profit maximizing, should you continue at , increase q above 200, or reduce q below 200? Would you do better to shut down?

Reference no: EM13751152

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