Choosing the appropriate level of output for his firm

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Suppose that you are having a discussion with a manager from a profit-maximizing firm about choosing the appropriate level of output for his firm. The manager says that his business has exceptionally high fixed costs. He explains that he attempts to mitigate this fact by producing more units of output in order to “spread” these costs over many units of production (i.e., he is attempting to lower average costs). As a seasoned economics student, what would you tell this manager about his approach to choosing his business’s output level, ceteris paribus?

Reference no: EM13999432

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