Marginal revenue is often shown graphically as a downward-sloping line representing how a company usually has to decrease its prices to drive additional sales. A company looking to maximize its profits will produce up to the point where marginal cost equals marginal revenue. When marginal revenue ...
When we look at the marginal revenue curve versus the demand curve graphically, we notice that both curves have the same intercept on the P axis, because they have the same constant, and the marginal revenue curve is twice as steep as the demand curve, because the coefficient on Q is twic...
Marginal cost is an important factor in economic theory because a company that is looking to maximize its profits will produce up to the point where marginal cost (MC) equalsmarginal revenue (MR). Beyond that point, the cost of producing an additional unit will exceed the revenue generated. E...
Now the question is whether average revenue is different from price or these two concepts mean the same thing. If a seller sells various units of a product at the same price, then average revenue would be the same thing as price. But when he sells different units of a given product at ...
This surplus is applied towards absorption of fixed cost for the period. In other words, the excess of sale revenue over variable cost of a particular period is a sort of contribution made by the product sold during that period towards recoupment of fixed cost. ...
They show that when a separate completion benefit exists upon completion of a public project, equilibria in which the project is fully funded may exist when the project is funded dynamically over a number of rounds. This is true even when such equilibria would not exist if the project was ...