After selling 1,000 three-ring binders Tony DiFulvio realizes that the marginal revenue from selling the last binder was less than the marginal cost. From this we can conclude that Tony's profit would be greater if he sold an additional three-ring binder. Tony should shut down his business temporarily. Tony's business earns a short-run economic profit. Tony's profit fell after selling his 1,000th three-ring binder.

After selling 1,000 three-ring binders Tony DiFulvio realizes that the marginal revenue from selling the last binder was less than the marginal cost. From this we can conclude that Tony's profit would be greater if he sold an additional three-ring binder. Tony should shut down his business temporarily. Tony's business earns a short-run economic profit. Tony's profit fell after selling his 1,000th three-ring binder.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 2PA

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