A manufacturing firm produces and sells 3000 units of a product X, Where its average cost is equal to the marginal cost and makes only normal profit.

Description

A manufacturing firm produces and sells 3000 units of a product X,  Where its average cost is equal to the marginal cost and makes only normal profit. Next year, the firm gets an order of additional 500 units. Should the firm, a profit maximizing one, accept or reject the order? Explain and Justify your answer by using imaginary cost curves.

 

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