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QUESTION 30 Based on current production plans, Tesla will produce the Model 3 sedan at a...

QUESTION 30

  1. Based on current production plans, Tesla will produce the Model 3 sedan at a marginal cost of $30,000 per car and earn marginal revenue of $35,000 per cat. How should Tesla adjust this plan in order to increase profits?

    A.

    Increase output
    B.

    We do not have enough information to answer this question
    C.

    Decrease output
    D.

    Do not change planned output
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Answer #1

Profit maximization condition is MR=MC.

MC= $30,000

MR= $35,000

Because MR>MC , So , Tesla should adjust this plan by increase output in order to increase profits. Hence,option(A) is correct.

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