header bg


Notasled, Inc., a producer of cafeteria trays, operates in a perfectly competitive market. If the market price of a cafeteria tray is $3.25, Notasled will increase production so long as:

A marginal cost is less than $3.25.

A firm will increase production if its marginal revenue is greater than its marginal cost, until it reaches the profit-maximizing output level at which marginal revenue equals marginal cost. Under perfect competition, marginal revenue equals price.