A baseball manufacturer is currently producing 10,000 baseballs. At this level o

Question

A baseball manufacturer is currently producing 10,000 baseballs. At this level of production, MC is estimated at $2.50 and average cost at $2.00. Baseballs sell for $3.00 at this production level, and marginal revenue is $2.25. From this information we can conclude:

a. The manufacturer is a competitive firm (price-taker).
b. The producer is maximizing production at this output level.
c. The manufacturer is producing too many baseballs.
d. The manufacturer should produce more baseballs.

Explanation / Answer

Hi, If you like my answer rate me first...that way only I can earn points. Thanks Since MC>MR, so the firm is over producing. So option c)

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