Maximize its profits
A firm jointly owned and run by two or more people who share profits and losses is a partnership.
The relationship between price and marginal revenue affects a competitive firm's decision-making by influencing how much to produce and sell. When the price is higher than the marginal revenue, the firm will produce more to maximize profits. If the price is lower than the marginal revenue, the firm may reduce production to avoid losses. This helps the firm determine the optimal level of output to maximize profits in a competitive market.
revenue equals the price of each input
Explain how monopoly causes an inefficient allocation of resources when the competitive firm does not even when both seek to maximize profit
Maximize its profits
A firm jointly owned and run by two or more people who share profits and losses is a partnership.
The relationship between price and marginal revenue affects a competitive firm's decision-making by influencing how much to produce and sell. When the price is higher than the marginal revenue, the firm will produce more to maximize profits. If the price is lower than the marginal revenue, the firm may reduce production to avoid losses. This helps the firm determine the optimal level of output to maximize profits in a competitive market.
revenue equals the price of each input
sole propietorship
Explain how monopoly causes an inefficient allocation of resources when the competitive firm does not even when both seek to maximize profit
If a firm's marginal revenue is greater than its marginal cost, it should increase production to maximize profits.
if marginal production costs exceed marginal revenues, the firm will suffer losses, not profits.
A firm can use the Cobb-Douglas production function to maximize profits by determining the optimal combination of inputs, such as labor and capital, to achieve the highest level of output at the lowest cost. For example, a manufacturing company can use the Cobb-Douglas function to analyze how changes in labor and capital inputs affect production levels and costs, allowing them to make informed decisions on resource allocation to maximize profits.
The marginal principle will tell us that a firm will maximize it's profits by choosing a quantity at which, price=marginal costs.
This type of partner contributes capital and takes active part in the management of the firm's business.He shares in the profits and losses of firm and his liability is unlimited.However, his connection with his firm is not known to the outside world.
When profits are zero, the firm is earning sufficient revenue to cover the opportunity cost.