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Marginal revenue equals?
marginal cost of production
What happens when the slope of the total revenue curve is equal to the slope of the total cost curve?
a. monopoly profit is maximized. b. marginal revenue equals marginal cost. c. the marginal cost curve intersects the total average cost curve. d. the total cost curve is at its minimum. e. Both A and B
Why is it that when a firms marginal revenue product equals the wage rate marginal revenue also equals the marginal cost?
When a firm's marginal revenue product (MRP) equals the wage rate, it indicates that the additional revenue generated by hiring one more unit of labor matches the cost of employing that labor. At this point, the firm maximizes its profit by employing labor up to the point where the cost of additional labor (wage) equals the additional revenue generated (MRP). Consequently, since marginal revenue (MR) from selling output also equals the price in a competitive market, and given that marginal cost (MC) reflects the cost of producing additional output, the condition where MRP equals wage leads to the situation where MR equals MC, ensuring optimal production decisions.
What is the relationship between marginal cost and marginal revenue in determining optimal production levels?
The relationship between marginal cost and marginal revenue in determining optimal production levels is that a company should produce at a level where marginal cost equals marginal revenue. This is because at this point, the company maximizes its profits by balancing the additional cost of producing one more unit with the additional revenue generated from selling that unit.
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.
Marginal revenue equals?
marginal cost of production
What happens when the slope of the total revenue curve is equal to the slope of the total cost curve?
a. monopoly profit is maximized. b. marginal revenue equals marginal cost. c. the marginal cost curve intersects the total average cost curve. d. the total cost curve is at its minimum. e. Both A and B
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 the relationship between marginal cost and marginal revenue in determining optimal production levels?
The relationship between marginal cost and marginal revenue in determining optimal production levels is that a company should produce at a level where marginal cost equals marginal revenue. This is because at this point, the company maximizes its profits by balancing the additional cost of producing one more unit with the additional revenue generated from selling that unit.
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 is the relationship between marginal revenue and marginal cost in determining the optimal level of production for a firm?
The relationship between marginal revenue and marginal cost in determining the optimal level of production for a firm is that the firm should produce at a level where marginal revenue equals marginal cost. This is because at this point, the firm maximizes its profits by balancing the additional revenue gained from producing one more unit with the additional cost of producing that unit.
What is the formula to find the marginal cost?
Marginal Cost = Marginal Revenue, or the derivative of the Total Revenue, which is price x quantity.
What is the level of output every firm strives for?
The level of output every first strives for is when marginal revenue equals marginal cost.
When marginal revenue equals marginal cost?
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
How can marginal revenew and marginal costs help set the most profitable putput level?
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.
A monopolist will set its production at a level where marginal cost is equal to?
A monopolist will set production at a level where marginal cost is equal to marginal revenue.
Marginal cost equals marginal revenue?
If the firm operates in a perfectly competitive industry, profit is maximised at the ouput level where mc=mr.
