How Producers Decide About Optimal Choice

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How Producers Decide About Optimal Choice

Assume that a firm which is thinking to open a new production line of car manufacturing. Rational decision involves the cost and benefit of that car’s production. Costs will be additional labor employed, additional raw material and additional parts & components that have to be bought. Benefits will be additional revenue that the firm will get by selling the additional number of cars. It will be profitable to invest if revenue is greater than the cos

How Producers Decide About Optimal Choice

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