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Company benefits from economies of scale

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A company produces 1,000 soccer balls each day, which it sells to customers for $25 each. All costs associated with production and sales total $12,500; however, if the company were to produce one additional soccer ball per day, total costs would increase to $12,700. It follows that:

  • the company benefits from economies of scale.
  • marginal cost equals $100.
  • the company has negative economic profit.
  • marginal cost equals $200.

Reference no: EM131218573

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