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Profits will be maximized when marginal revenue is equal to marginal costs. This will only happen in cases where there are fixed costs.

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11y ago

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A producers profits are maximized when marginal costs are .?

equal to marginal revenue


A producers profits are maximized when marginal costs are?

equal to marginal revenue


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 happens when marginal revenue equals marginal cost?

profit is maximized


Where is profit maximized on a graph?

Profit is maximized on a graph where the marginal cost curve intersects the marginal revenue curve.


A company is maximizing profit when marginal revenue?

A company maximizes profits when marginal revenue equals marginal costs.


Why is profit maximized when marginal revenue equals marginal cost?

Profit is maximized when marginal revenue equals marginal cost because at that point, the additional revenue gained from selling one more unit is equal to the additional cost of producing that unit. This balance ensures that the company is making the most profit possible, as any further increase in production would result in higher costs than revenue gained.


What should the firm do if marginal revenue is greater than marginal cost?

If a firm's marginal revenue is greater than its marginal cost, it should increase production to maximize 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.


True or false Profits will be maximized when total revenue equals total cost?

yes


True or false Will profits be maximized when total revenue equals total cost?

yes


In the long run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to?

marginal revenue