The two blanks in the question below have a drop-down that has the option to sel
ID: 2873215 • Letter: T
Question
The two blanks in the question below have a drop-down that has the option to select either Possible or Not Possible.
Question: If the marginal profit is negative for the sale of a certain number of units of a product, is the company that is marketing the item losing money on the sale? Explain.
Answer (fill in the blanks): If the marginal profit is negative for the sale of a certain number of units, it is _____________ (possible or not possible) to know whether the company is losing money on the total sale. However, it is _____________ (possible or not possible) to say that the company is losing money on the sale of any more units sold at that point.
Explanation / Answer
Yes, it is possible to know whether the company is losing money on the total sale or not, as the marginal profit can be obtained by differentiating the total profit on a sale of a company and the negative derivative values says that the function is decreasing. However, it is not possible to say that company is losing money on the sales of any more units sold at the point, as the sales many increases after certain numbers units sold.
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