The marginal cost increases as production levels rise because of diminishing returns. This means that as more units are produced, the additional cost of producing each additional unit also increases. This is due to factors such as limited resources, increased labor costs, and inefficiencies in the production process.
If a firm's marginal revenue is greater than its marginal cost, it should increase production to maximize profits.
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.
A monopolist will set production at a level where marginal cost is equal to marginal revenue.
marginal cost of production
...of production may be rising? Answer: Because of increase in demand.
If a firm's marginal revenue is greater than its marginal cost, it should increase production to maximize profits.
If MR is greater than MC, the firm should increase their production. The ideal amount of production is determined by allowing the marginal cost to equal the marginal revenue.
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.
A monopolist will set production at a level where marginal cost is equal to marginal revenue.
Marginal cost is the increase or decrease in the total cost of a production run for making one additional unit of an item.
marginal cost of production
...of production may be rising? Answer: Because of increase in demand.
Marginal cost is
To determine the marginal cost of a product or service, you can calculate the change in total cost when producing one additional unit. This can be done by dividing the change in total cost by the change in quantity produced. The marginal cost helps businesses make decisions about pricing and production levels.
increase output
when the marginal benefit of consumption is equal to the marginal cost of production.
Marginal cost of production