Question

help solving and explanation

A firm is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5. The firm can sell the 100th unit for $4.75. The firm should continue to produce 100 units in order to maximize its profits.

Answer 1

Ans:

Ans:
It is False

For Producing 100 Th unit is lead to loss Because

Cost of Producing 100th unit =$5
Selling Price or Maximum Fetchable Price is $4.75

which is

Selling Price is $4.75<Cost of Producing 100th unit =$5 Leads to 0.25 Loss

So Manager report that if we produce 100th unit it lead to Profits
However , for 100th Unit It gives loss of 0.25$ loss

So Manager Report is false