Answer to Question #182131 in Economics for irma cora

Question

10 hamburgers x P200 = P2000, total cost = P1500, profit = P500; plan to increase production by 3 more and this will cost an additional P700. Should you increase production by 3 more hamburgers?

Answer 1

The increase in production by 3 more hamburgers will increase total revenue by 200×3 = P600 and this will cost an additional P700, so the profit will decrease by 600 - 700 = -100.

So, you should not increase production by 3 more hamburgers.