PROBLEMS & EXERCISES

UNIT TWO (FOR EXAM TWO)
Unit Two: Assignment 3: Problem 4 from page 614
You didn’t fall for the author’s trick question, did you? You should be seeking to purchase the firm with the higher total profit, not the one with the higher profit per unit. (You would prefer to sell 100 ice cream cones per day at a profit of 40 cents each rather than one ice cream cone at a profit of 80 cents.) We’re assuming that each firm is producing optimally in accordance with the MR = MC method.
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