Maximizing π is different from maximizing quantity (q) subject to a cost constraint (C=?) or minimizing C subject to a quantity constraint (q = ?). Find q that maximizes π and π =f(q), so one variable and no constant. ? q ? MR=MC is the profit maximization rule --Marginalism...
The formula needed to calculate profit maximization is: Marginal Cost = Marginal Revenue The formula needed to calculate the marginal revenue: Marginal Revenue = Change in revenue / Change in quantity The formula needed to calculate the marginal cost is: ...
Explain the general idea of the profit maximization and output formula. What is the profit-maximizing level of price and output for a monopolist? 1. What is the Quantity that maximizes profit? a. 0 b. 8 c. 10 d. 9 2. At the profit-maximizing quantity, what is the Total Cost (TC)...
The implication of the profit-maximizing markup formula is that more elastic demand gives rise to a smaller markup. The inverse relationship between the absolute value of price elasticity and optimal markup is evident from the following expression which defines m, the profit-maximizing markup over ...
markets- firms don't have any influence over the price that they can charge.) One way to find the profit-maximizing quantity would be to take the derivative of the profit formula with respect to quantity and setting the resulting expression equal to zero and then solving for quantity. ...
Determine the profit maximizing quantity. In this case, the profit-maximizing quantity is 60 pens. This is the point before marginal profit becomes negative. Why? It is likely that the more pens sold, the higher variable costs are. Variable costs include labor, commissions, raw materials and ...
What is the difference between wholesale and retail price? Retailers set retail pricing and is the final selling price for customers. Wholesale prices are typically much lower than retail prices because retailers are offered a discount in exchange for agreeing to purchase a large amount of product....
Marginal Profit Formula The marginal profit is the difference between the marginal revenue and marginal cost. Marginal Profit = Marginal Revenue – Marginal Cost Where: Marginal Revenue = (Change in Revenue) ÷ (Change in Quantity) Change in Revenue (Δ): The increase or decrease in revenue expr...
The profit maximizing quantity, in this monopolistically competitive market, is: What are economic profit-maximizing strategies that may be made by a perfectly competitive firm? In which market, a firm cannot determine price ? (A) Perfect competition (B) Monopoly (C) Monopolistic competi...
In other words, the profit maximizing quantity and price can be determined by setting marginal revenue equal to zero, which occurs at the maximal level of output. Marginal revenue equals zero when the total revenue curve has reached its maximum value. An example would bea scheduled airline flight...