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In the long run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to?
Wiki User
∙ 12y ago
marginal revenue
Wiki User
∙ 12y ago
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In the long-run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to?
marginal revenue
When can monopolist earn an economic 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.
How does Marginal analysis help to maximize profits?
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What does the marginal principle of economics state?
The marginal principle will tell us that a firm will maximize it's profits by choosing a quantity at which, price=marginal costs.
A firm will maximize profits by employing the quantity of each input where the marginal does what?
revenue equals the price of each input
In the long-run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to?
marginal revenue
Explain why a monopolist must lower its quantity relative to a competitive market to maximize its profits?
A monopolist must lower its quantity relative to a competitive market to maximize its profits because the monopolist already controls and owns the largest share of the market.
When can monopolist earn an economic 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.
Why a monopolist must lower its quantity relative to a competitive market to maximize its profits?
A monopolist has to lower its quantity relative to the competitive market to maximize profits because the monopolist is already in control of the biggest part of the market. This means that because they're already in control, to keep the market competitive they need to release the same amount of product as their competition.
How does Marginal analysis help to maximize profits?
please answer my question i am in need of it now
What does the marginal principle of economics state?
The marginal principle will tell us that a firm will maximize it's profits by choosing a quantity at which, price=marginal costs.
Effect of a monopolist's price increase?
If a monopolist raises his prices above marginal cost, he will increase his profits. This seems like a good thing for the monopolist. However, the down side is that it reduces the well-being of consumers. Most times, the harm to consumers is greater than the gain of the monopolist.
A firm will maximize profits by employing the quantity of each input where the marginal does what?
revenue equals the price of each input
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.
What is a business firm's marginal cost?
Marginal cost, which is the cost of producing one more unit of output, helps determine the level at which profits will be maximized.
Profits will be maximized when marginal revenue?
Profits will be maximized when marginal revenue is equal to marginal costs. This will only happen in cases where there are fixed costs.
Application of calculus to business decision process?
Microeconomics, which determines much of the business decision process, looks to the margin for much of its data. What is the marginal cost of producing one more piece of output? What is the marginal cost of hiring one more employee? What is the marginal benefit of opening another store? In other words, the business decision process is not concerned with the total cost of producing all its units as much as producing just one more. In this sense, the margin is the derivative of the total cost. When the marginal benefit of something is greater than the marginal cost, the action will be followed. If the marginal cost is greater, it will not be. A company will produce more output until marginal benefit is equal to marginal cost. To maximize profits, the decisions of a company need to be made based upon this knowledge and some very complex calculus to find just want marginal costs and benefits of any given action are.
