A manufacturer of solar panels, Helios Tech, increases its weekly production and sales from Q1 Q_1\,Q1 to Q2 Q_2\,Q2 units. This expansion in output will definitely lead to an increase in the firm's total profit (or a decrease in its total losses) if and only if:
the marginal revenue of each additional unit produced and sold over this range is greater than its marginal cost.
the selling price of the solar panels is greater than the average total cost of production at Q2Q_2Q2.
the average fixed cost of production is minimized at the new output level Q2Q_2Q2.
the total revenue at Q2Q_2Q2 is greater than the total variable cost of producing Q2Q_2Q2.
156 exam-style questions on AQA A Level Economics 1.4 Production, costs and revenue, covering 1.4.1 Production and productivity, 1.4.2 Specialisation, division of labour and exchange, 1.4.3 The law of diminishing returns and returns to scale (A-level only), 1.4.4 Costs of production, 1.4.5 Economies and diseconomies of scale, 1.4.6 Marginal, average and total revenue, 1.4.7 Profit, and 1.4.8 Technological change (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.