Let the demand facing a firm for its product be expressed by the following functions Q=25-0.5P Where Q=quantity and P=price, and cost function as C=25-2Q+4Q2 Compute a) Profit maximizing output, b) Justify profit maximizing output
profit maximization is the (short run) process by which a firm determines the price and output level that returns the greatest profit
is producing where price exceeds marginal costs
the point where the marginal cost curve intersects the marginal revenue curve
The best way to find the profit maximizing level of to calculate it using the profit maximizing formula. To calculate it you need to know margins and how long it takes you to do each task.
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
because the Price is Right
profit maximization is the (short run) process by which a firm determines the price and output level that returns the greatest profit
true
is producing where price exceeds marginal costs
the point where the marginal cost curve intersects the marginal revenue curve
The answer depends on what information you have about profits per units sold, or on the costs and revenues per unit.
The best way to find the profit maximizing level of to calculate it using the profit maximizing formula. To calculate it you need to know margins and how long it takes you to do each task.
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
The monopolist can choose either the price or the quantity, but choosing one determines the other - they come in pairs.
To determine the profit-maximizing output from a table, look for the quantity where the marginal revenue equals the marginal cost. This is the point where the firm maximizes its profit.
The profit maximizing point on the graph for this business model is where the marginal revenue equals the marginal cost.
rational, self interested consumers rational, profit maximizing firms competitive markets with price taking behavior