The level of output every first strives for is when marginal revenue equals marginal cost.
Answers for If A Firm Is Producing A Level Of Output Where MR Exceeds MC, Would It Improve Profits By Increasing Output, Decreasing Output Or Keeping Output Unchanged?
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Marginal physical product is zero
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is producing where price exceeds marginal costs
Answers for If A Firm Is Producing A Level Of Output Where MR Exceeds MC, Would It Improve Profits By Increasing Output, Decreasing Output Or Keeping Output Unchanged?
The monopolist's profit maximizing level of output is found by equating its marginal revenue with its marginal cost, which is the same profit maximizing condition that a perfectly competitive firm uses to determine its equilibrium level of output. Indeed, the condition that marginal revenue equal marginal cost is used to determine the profit maximizing level of output of every firm, regardless of the market structure in which the firm is operating.
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Marginal physical product is zero
Shutdown
this is obtained when a firm equates its marginal revenue to its marginal cost.At a level of output where MR exceeds MC,then the firm should increase output since the addition to revenue is greater than the addition to revenue.Where a firm's MR is less than its MC,the firm should lower its output since the addition to costs is greater than the addition to revenue.
Depending on the marginal output of the workers at that level of output, an additional two could increase output my more than 8, exactly eight, or less than 8 units.
is producing where price exceeds marginal costs
A firm adds its fixed costs and capable costs to determine its todal cost at each level of output.
At the output level at which the slopes of the total revenue and total cost curves are equal, provided the firm is covering its variable cost
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
maximizing the difference between total revenue and total cost