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What is achieved by selecting the quantity of activity at which marginal benefit equals marginal cost?
Selecting the quantity of activity where marginal benefit equals marginal cost ensures that resources are allocated efficiently. At this point, the net benefit to society is maximized, as the additional benefit derived from the last unit produced equals the additional cost incurred. This balance helps prevent overproduction or underproduction, leading to optimal decision-making in both economic and resource management contexts.
What else can I help you with?
If you have total cost and total benefit how do you get marginal cost and marginal benefit?
Marginal cost is total cost/quantity Marginal benefit is total benefit/quantity
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.
Equation for marginal cost and average cost?
Marginal cost - the derivative of the cost function with respect to quantity. Average cost - the cost function divided by quantity (q).
What does profit maximizing quantity of output mean?
Its the level of production where marginal cost is equal to marginal revenue.
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.
If you have total cost and total benefit how do you get marginal cost and marginal benefit?
Marginal cost is total cost/quantity Marginal benefit is total benefit/quantity
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.
Equation for marginal cost and average cost?
Marginal cost - the derivative of the cost function with respect to quantity. Average cost - the cost function divided by quantity (q).
What does profit maximizing quantity of output mean?
Its the level of production where marginal cost is equal to marginal revenue.
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.
How can one calculate marginal revenue from a demand curve?
To calculate marginal revenue from a demand curve, you can find the slope of the demand curve at a specific quantity using calculus or by taking the first derivative of the demand function. The marginal revenue is then equal to the price at that quantity minus the slope of the demand curve multiplied by the quantity.
Marginal product curve?
A marginal product curve is a visual presentation that demonstrates the relationship between the marginal product and the quantity of its input. All other inputs are fixed.
Why average cost increase when marginal cost is increasing?
Marginal cost = derivative of (Total cost/Quantity) Where Total cost = fixed cost + variable cost Marginal cost = derivative (Variable cost/Quantity) (by definition, fixed costs do not vary with quantity produced) Average cost = Total cost/Quantity The rate of change of average cost is equivalent to its derivative. Thus, AC' = derivative(Total cost/Quantity) => derivative (Variable cost/Quantity) = MC. So, when MC is increasing, AC' is increasing. That is, when marginal cost increases, the rate of change of average cost must increase, so average cost is always increasing when marginal cost is increasing.
How can one calculate marginal revenue from a table of data?
To calculate marginal revenue from a table of data, you can find the change in total revenue when the quantity sold increases by one unit. This can be done by comparing the total revenue for two different quantities and dividing the change in total revenue by the change in quantity. The resulting value is the marginal revenue for that specific quantity.
What does marginal costs mean?
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit
Formula for marginal product of labor?
Change in Quantity/ Change in Units of Labor.
Why does marginal cost fall and then start rising?
Marginal cost generally falls as quantity increases becausepeople learn to do their jobs better as they produce more
