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What happens to a company if marginal cost becomes higher than price?
The company will go out of business
When demand is perfectly elastic what happens to marginal revenue?
When Demand is perfectly elastic, Marginal Revenue is identical with price.
How does a monopolistically competitive firm determine its profit-maximizing price?
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
What happens to the MP of labor when the market price of the good produced increases?
When the market price of the good produced increases, the marginal product (MP) of labor typically becomes more valuable, leading firms to hire more workers to maximize profit. This is because the additional revenue generated from hiring each additional worker exceeds the cost of employing them, increasing the demand for labor. Consequently, the marginal product of labor may increase as firms optimize their production processes to take advantage of higher prices, potentially leading to higher wages in the labor market.
Why monopoly is allocatively inefficient relative to perfectly competitive market?
A monopoly produces at a point where marginal revenue equals marginal cost, they don't charge this price, but charge a higher price that corresponds with the demand they face. Therefore they produce less and charge more than a competitive firm that equates the price to marginal cost.
What happens to a company if marginal cost becomes higher than price?
The company will go out of business
What If marginal cost becomes higher than price what happens to a company?
The company will go out of business
When demand is perfectly elastic what happens to marginal revenue?
When Demand is perfectly elastic, Marginal Revenue is identical with price.
How does a monopolistically competitive firm determine its profit-maximizing price?
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
Why monopoly is allocatively inefficient relative to perfectly competitive market?
A monopoly produces at a point where marginal revenue equals marginal cost, they don't charge this price, but charge a higher price that corresponds with the demand they face. Therefore they produce less and charge more than a competitive firm that equates the price to marginal cost.
When do firm adopt Marginal Cost pricing?
A company will choose marginal cost pricing, setting the price of something at or just above the variable cost of production, when they have unused remaining production capacity, or when they are not able to sell the item at a higher price.
Does the price equal the marginal revenue in a competitive market?
In a competitive market, the price does equal the marginal revenue.
Is marginal revenue equal to price in economics?
In economics, marginal revenue is not always equal to price. Marginal revenue is the additional revenue gained from selling one more unit of a product, while price is the amount customers pay for that product. In competitive markets, where firms are price takers, marginal revenue is equal to price. However, in markets with market power, such as monopolies, marginal revenue is less than price.
What is the relationship between marginal utility and demand?
There is a close relationship between the marginal utility and price of a commodity.The additional satisfaction from the consumption of an additional unit of the commodity is called marginal utilty. Price means the value of the goods expressed in the terms of money.Price of all units of he same goods of consumption are more or less identical.It means that the consumer pays the same price for all the units of the same goods of consumption. But marginal utility of the goods of consumption start diminishing as the consumer increase the units of consumption of the commodity.Therefore the consumer will like to pay that price for the commodity,which is equal to the marginal utility he gets from the commodity.If the price of the commodity are higher than the marginal utility he derives from the commodity he will not like to purchase the commodity. In this way there is a clod\se relation between the marginal utility and the price of the commodity.
Is marginal revenue equal to price in a perfectly competitive market?
In a perfectly competitive market, marginal revenue is equal to price.
Is the price equal to marginal revenue in a perfectly competitive market?
In a perfectly competitive market, the price is equal to the marginal revenue.
Why do the demand and marginal revenue curves coincide?
Because in Pure Competition, Demand equals Price, and Price equals Marginal Revenue;hence, Demand equals Marginal revenue.
