Why is it that firms maximize profits where MR = MC? Explain and give an example. Explain why economic profit provides a better measure of profit than accounting profit. Why are fixed costs important, when maximizing profits? Why is economic profit a ...
Explain, For perfectly competitive firms, profits are maximized at the rate of output where price equals marginal cost. Remember profit is considered a cost. Explain with an example. Explain the logic behind the profit maximization rule Marginal Revenue...
Seriously, people are apparently unhappy when they compare their lot to people immediately around them and see that they rank below, as opposed to what other people enjoy in another country. Which goes back to the question, “What do you really need”? It isn’t more stuff, or consumer...
Explain why, for all firms, profits are maximized where marginal revenue equals marginal cost. Why is it possible for average cost to be decreasing while marginal cost is increasing? Explain why the average total cost is minimized when it is equal to the marginal cost. ...
Why is there such a focus on revenue when total profits is the money the company is actually making? Why should companies not be taxed, based on gross revenue, rather than profits? Isn't revenue a fair measure of economic activity that they ar...
Why are fixed costs important, when maximizing profits? Why does a firm's marginal cost curve slope upward in the short run? Why marginal cost increases or decreases with increase or decrease in production levels? Why do we want marginal cost to equal marginal benefits so that there is a ne...
Why does the income demand curve bend backwards when income levels are rising? Why is profit not maximized when marginal benefit is lower than marginal cost? Why are economists interested in increasing marginal costs? Why is the marginal revenue curve for the individual producer...
Explain why selling output at a price below that at which marginal revenue equals marginal cost (MR = MC) might serve to deter the entry of a potential competitor. To maximize profits, a monopolist chooses the quantity where: a. marginal revenu...
Why is profit not maximized when marginal benefit is lower than marginal cost? What is the reason for the marginal revenue of a monopolist below its average revenue? Why in a perfectly competitive market, no firm realizes economic profits? In a competitive market why would the mar...
Explain why words MR = MC produces the maximum profit for a company. Why do perfectly competitive firms make zero economic profit in the long run? Why are fixed costs important, when maximizing profits? Explain why economic efficiency might not be achieved. Why is P=MC whe...