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Why is the equality of marginal revenue to marginal cost essential to profit maximuzation in all of the market structures?
When Marginal Cost is below Marginal Revenue, profit is increasing. When Marginal Cost is above Marginal Revenue, profit is decreasing. Since the goal of firms is to maximise profit, they should produce at a level where the MR of producing another unit is equal to the Marginal Cost of producing another unit. Firms should keep producing until this point because there is a hidden profit in MC. This is because we are not taking into account the Accounting profit.
Where is profit maximized on a graph?
Profit is maximized on a graph where the marginal cost curve intersects the marginal revenue curve.
What happens when marginal revenue equals marginal cost?
profit is maximized
The equality of marginal revenue and marginal cost is essential for profit maximization in all market structures because if?
Marginal revenue and marginal cost are equal, any other output level will result in reduced profit.
Necessary and sufficient condition for profit maximization?
Marginal Revenue = Marginal Cost
Why is the equality of marginal revenue to marginal cost essential to profit maximuzation in all of the market structures?
When Marginal Cost is below Marginal Revenue, profit is increasing. When Marginal Cost is above Marginal Revenue, profit is decreasing. Since the goal of firms is to maximise profit, they should produce at a level where the MR of producing another unit is equal to the Marginal Cost of producing another unit. Firms should keep producing until this point because there is a hidden profit in MC. This is because we are not taking into account the Accounting profit.
Where is profit maximized on a graph?
Profit is maximized on a graph where the marginal cost curve intersects the marginal revenue curve.
What happens when marginal revenue equals marginal cost?
profit is maximized
The equality of marginal revenue and marginal cost is essential for profit maximization in all market structures because if?
Marginal revenue and marginal cost are equal, any other output level will result in reduced profit.
Where will A profit maximizing firm produce?
Where the marginal benefits equal marginal costs.
Necessary and sufficient condition for profit maximization?
Marginal Revenue = Marginal Cost
A company is maximizing profit when marginal revenue?
A company maximizes profits when marginal revenue equals marginal costs.
The level of profit maximizing output is reached when marginal cost is?
equal to marginal revenue
If average profit increases with output marginal profit must be?
greater than average profit.
How can one determine the profit maximizing output from a table?
To determine the profit-maximizing output from a table, look for the quantity where the marginal revenue equals the marginal cost. This is the point where the firm maximizes its profit.
What is the profit maximizing point on the graph for this particular business model?
The profit maximizing point on the graph for this business model is where the marginal revenue equals the marginal cost.
What does profit maximizing quantity of output mean?
Its the level of production where marginal cost is equal to marginal revenue.
