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At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
Laury Homenick
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Marginal revenue equals?
marginal cost of production
What happens when marginal revenue equals marginal cost?
profit is maximized
Cost of goods sold plus gross profit equals?
Cost of goods plus gross profit margin equals to total sales revenue of firm.
Is contribution margin equals sale revenue minus all variable cost?
yes.
True or false Will profits be maximized when total revenue equals total cost?
yes
True or false Profits will be maximized when total revenue equals total cost?
yes
True or false Profit equals Total Cost less Total Revenue?
TRUE
What is the formula for Total Revenue and Total Cost?
Total revenue equals the sale price of products multiplued by the total amount of units sold
Why are profit maximize when marginal revenue is equal to marginal cost?
Profits are maximized when marginal costs equals marginal revenue because fixed costs are now spread over a larger amount of revenue. This means that total cost per unit declines and profits increase. Another way to say this is that this is the effect of scale. When marginal revenue equals marginal costs, in a growing revenue situation, you gain economies of scale and higher profits.
How does cost affect revenue and profitability?
There could be a variety of answers to this question, depending on what perspectives you use to answer them. ( accounting, economics etc ). Using my understanding of Economics, it's important to first have an equation to link all these variables. Profit = Revenue - Cost. This is called the profit equation, where profit equals revenue minus cost. Revenue is the sales that you obtain from day to day sales. It's expressed in a monetary value. For example, if I am able to sell 10 hotdogs today at US dollar 5 for each hotdog, then my revenue for the day will be US Dollars 50. However this is my revenue and not my profit, as I incurred cost while earning this revenue. Lets say the cost of this business is US Dollars 3. If this is the case the profit will be 50 - 3 which equals 47. Hence profit is 47. This equation shows that an increase in cost, can reduce the profit. At some instances, the increase in cost can increase revenue, depending on the price that you are selling and also the quantity sold. This will depend on how large the increase is. Generally if Revenue is more than cost, there is profit, while if Cost is more than revenue that is lost. If Revenue equals Cost, there is break even. This means that the profit is zero. Hope this helps. (cheong@bgymail.gd.cn)
Why do the demand and marginal revenue curves coincide?
Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal revenue.
Why does average cost include profit?
it doesn't cost is cost revenue is revenue
