Discuss how the equality of marginal cost and marginal revenue maximizes profits OR minimizes losses ?
Discuss how the equality of marginal cost and marginal revenue maximizes profits OR minimizes losses ?
Homework Answers
The production of any good result a fall in profit or increase in losses if the last unit produced goods adds more cost than the revenue (it means MC of last unit produced is more than the MR of last unit produced).
However, the profit will increase or losses decrease as long as MR of last unit of output produced is higher than the MC of last unit produced.
So, the profit maximization or loss minimization occurs at the equality of marginal cost (MC) and marginal revenue (MR).
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Discuss how the equality of marginal cost and
marginal revenue maximizes profits OR minimizes losses
?
marginal revenue A monopolist maximizes profit by choosing the quantity at which marginal revenue equals at...
marginal revenue A monopolist maximizes profit by choosing the quantity at which marginal revenue equals at that quantity because the demand curve is above the marginal-revenue curve. Profit equals mulitplied by the profit-maximizing quantity Price is and marginal cost average variable cost average cost marginal revenue. A monopolist maximizes profit by choosing the quantity at which marginal revenue equals Price is at that quantity because the demand curve is above the marginal-revenue curve. Profit equals the difference between the price...
19. A monopolist maximizes profit A] where marginal revenue equals marginal cost B] where average revenue...
19. A monopolist maximizes profit A] where marginal revenue equals marginal cost B] where average revenue equals average cost [C] where price equals marginal cost [D] by charging the highest possible price on the demand curve.
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes prof...
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes profit minimizes average total cost minimizes average variable cost QUESTION 32
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes pro...
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes profit minimizes average total cost minimizes average variable cost QUESTION 32 If marginal cost is rising average variable cost must be falling average fixed cost must be rising marginal product must be falling marginal product must be rising QUESTION 33 Diminishing marginal product suggests that additional units of output beccome less costly as more output is produced marginal cost is upward sloping...
3. Why is the equality of marginal revenue and marginal cost essential for profit maximization in...
3. Why is the equality of marginal revenue and marginal cost essential for profit maximization in all market structures? Explain why price can be substituted for marginal revenue in the MR - MC rule when an industry is purely competitive. 4. Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down? Explain using concepts covered in class
oiven cost the marginal revenue, marginal and fixed cost : MR = 1600-8Q MC = 4Q...
oiven cost the marginal revenue, marginal and fixed cost : MR = 1600-8Q MC = 4Q + 400 FC = 50,000 0 The optimal profit occurs when. (totadrevenue marginal revenue is equal to 1 ltorde Cost/ Marginal cost), ( fill in blanks with one of options) 3 find the quantity of that maximizes profits answer choices: 12, 10, 8,15
When total the monopolist is maximizing profits or minimizing losses, is greater I A. average revenue...
When total the monopolist is maximizing profits or minimizing losses, is greater I A. average revenue than marginal cost B. average revenue is average total cost greater - than is less than C. average total cost marginal cost D. is total revenue total cost greater than
In long run equilibrium, a competitive firm maximizes profits by a. producing an output level where...
In long run equilibrium, a competitive firm maximizes profits by a. producing an output level where marginal revenue equals marginal cost. b. charging a price equal to marginal revenue and marginal cost. c. charging a price where marginal cost equals average total cost. d. All of the above are correct.
A monopolist maximizes profits by choosing that output and price at which: (CHOSE ONE OF THE...
A monopolist maximizes profits by choosing that output and price at which: (CHOSE ONE OF THE FOLLOWING) marginal cost is equal to or comes as close as possible to (without exceeding) the marginal revenue. This is given that the price is greater than the average variable cost, and that the marginal cost is rising at the profit-maximizing output. average variable cost is equal to or comes as close as possible to (without exceeding) the marginal revenue. This is given that...
When a competitive firm will produce and earn economic profits. marginal revenue = average total cost...
When a competitive firm will produce and earn economic profits. marginal revenue = average total cost = marginal costs marginal revenue is above average costs marginal costs are decreasing marginal revenue is rising
marginal revenue A monopolist maximizes profit by choosing the quantity at which marginal revenue equals at that quantity because the demand curve is above the marginal-revenue curve. Profit equals mulitplied by the profit-maximizing quantity Price is and marginal cost average variable cost average cost marginal revenue. A monopolist maximizes profit by choosing the quantity at which marginal revenue equals Price is at that quantity because the demand curve is above the marginal-revenue curve. Profit equals the difference between the price...
19. A monopolist maximizes profit A] where marginal revenue equals marginal cost B] where average revenue equals average cost [C] where price equals marginal cost [D] by charging the highest possible price on the demand curve.
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes profit minimizes average total cost minimizes average variable cost QUESTION 32
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes profit minimizes average total cost minimizes average variable cost QUESTION 32 If marginal cost is rising average variable cost must be falling average fixed cost must be rising marginal product must be falling marginal product must be rising QUESTION 33 Diminishing marginal product suggests that additional units of output beccome less costly as more output is produced marginal cost is upward sloping...
3. Why is the equality of marginal revenue and marginal cost essential for profit maximization in all market structures? Explain why price can be substituted for marginal revenue in the MR - MC rule when an industry is purely competitive. 4. Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down? Explain using concepts covered in class
oiven cost the marginal revenue, marginal and fixed cost : MR = 1600-8Q MC = 4Q + 400 FC = 50,000 0 The optimal profit occurs when. (totadrevenue marginal revenue is equal to 1 ltorde Cost/ Marginal cost), ( fill in blanks with one of options) 3 find the quantity of that maximizes profits answer choices: 12, 10, 8,15
When total the monopolist is maximizing profits or minimizing losses, is greater I A. average revenue than marginal cost B. average revenue is average total cost greater - than is less than C. average total cost marginal cost D. is total revenue total cost greater than
When a competitive firm will produce and earn economic profits. marginal revenue = average total cost = marginal costs marginal revenue is above average costs marginal costs are decreasing marginal revenue is rising
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