optimal level of production
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What problems would a firm have in determining its optimal level of production. Give three examples of industries and what factors would influence their ability to estimate the optimal level of production.
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Demonstrate optimal level of production.
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As we know, the optimal level of production is where the marginal cost of the nth unit of a product is equal to the marginal return achieved from that unit. Thus we should have a clear understanding of the demand before determining the production level in a specific industry. For example in the auto industry we may have difficulties in determining the optimum quantity due to the increases and decreases in gas prices. We can forecast ...
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