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Your mariginal revenue must equal your marginal cost.
equal to marginal revenue
Profit is 2 times the selling price and is equal to the cost price or wholesale price , S.P.(rs. 10)= profit + C.P. (Rs. 5 + rs. 5) ,therefore cost price is Rs. 5
Cash does not equal profit. For example, a depreciation charge is a cost to the business, but no actual cash is expensed.
Cost-volume-profit analysis (CVP), or break-even analysis, is used to compute the volume level at which total revenues are equal to total costs.
Add the profit margin (cost*profit%) to the cost. Add the profit margin (cost*profit%) to the cost. Add the profit margin (cost*profit%) to the cost. Add the profit margin (cost*profit%) to the cost.
Its the level of production where marginal cost is equal to marginal revenue.
The basic formulas for profit are represented as follows: Profit = Price - Cost % Profit = Profit / Cost So, if an item sold for 2,602.58 and cost 2,090.42, the profit (absolute) is : Profit = 2,602.58 - 2,090.42 = 512.16 The % profit (relative to the cost) is: % Profit = 512.16 / 2,090.42 = 24.5%
Marginal revenue and marginal cost are equal, any other output level will result in reduced profit.
The elementary business and economic formula for deriving profit requires the variables of sales and cost to be known. Profit will equal net sales minus total costs.
When Marginal Cost is below Marginal Revenue, profit is increasing. When Marginal Cost is above Marginal Revenue, profit is decreasing. Since the goal of firms is to maximise profit, they should produce at a level where the MR of producing another unit is equal to the Marginal Cost of producing another unit. Firms should keep producing until this point because there is a hidden profit in MC. This is because we are not taking into account the Accounting profit.
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.