If the marginal profit is negative for the sale of a certain number of units of
ID: 1205106 • Letter: I
Question
If the marginal profit is negative for the sale of a certain number of units of a product, is the company that is marketing the item losing money on the sale? Explain.
If the marginal profit is negative for the sale of a certain number of units, it is a.) _____________ (possible or not possible) to know whether the company is losing money on the total sale. However, it is b.) _____________ (possible or not possible) to say that the company is losing money on the sale of any more units sold at that point.
Explanation / Answer
If the marginal profit is negative for the sale of a certain number of units, it is not possible to know whether the company is losing money on the total sale. However it is possible to say that the company is losing money on the sale of any more units sold at that point.