greater than average profit.
In economics, marginal profit is the difference between the marginal revenue and the marginal cost of producing an additional unit of output.
equal to marginal revenue
Its the level of production where marginal cost is equal to marginal revenue.
Marginal revenue and marginal cost are equal, any other output level will result in reduced profit.
A monopolist earns economic profit when the price charged is greater than their average total cost. To maximize profits, monopolies will produce at the output where marginal cost is equal to marginal revenue. To determine the price they will set, they choose the price on the demand curve that corresponds to this level of production.
In economics, marginal profit is the difference between the marginal revenue and the marginal cost of producing an additional unit of output.
equal to marginal revenue
To increase profit the firm will decrease output to a point where MC=MR. This is the Profit Maximisation point
The monopolist's profit maximizing level of output is found by equating its marginal revenue with its marginal cost, which is the same profit maximizing condition that a perfectly competitive firm uses to determine its equilibrium level of output. Indeed, the condition that marginal revenue equal marginal cost is used to determine the profit maximizing level of output of every firm, regardless of the market structure in which the firm is operating.
Its the level of production where marginal cost is equal to marginal revenue.
Marginal revenue and marginal cost are equal, any other output level will result in reduced profit.
A monopolist earns economic profit when the price charged is greater than their average total cost. To maximize profits, monopolies will produce at the output where marginal cost is equal to marginal revenue. To determine the price they will set, they choose the price on the demand curve that corresponds to this level of production.
The most profitable output level is when marginal costs equals marginal revenue. When marginal revenue is larger than marginal cost, that means that more product can be produced for more profit.
is producing where price exceeds marginal costs
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
This strategy is incorrect because they should decide the optimal quantity on the marginal revenue and marginal costs rather than the average revenue and average costs. It may not hold that the average revenue being higher than the average cost would lead to profits for the firm. To decide if they should produce an additional product, the firm should consider the additional cost involved with the production of this extra cost and the additional revenue incurred from the sale of this product. If this marginal revenue exceeds the marginal cost, then the firm should produce that additional unit. This decision is to be taken at all levels of output, and the firm should produce until the point where MR=MC.
Given that P=R-C where P is profit, R revenue and C cost, it follows that marginal profit dP/dQ = dR/dQ-dC/dQ where P,R and C are all functions of the output Q. Maximizing profit means setting dP/dQ = 0. Then dR/dQ = dC/dq where dR/dQ and dC/dq are marginal revenue and marginal cost respectively.