Explain the logic behind the profit maximization rule Marginal Revenue (MR) = Marginal Cost (MC). Why does producing and selling a quantity where MR = MC necessarily maximize profits or minimize losse Assume a profit maximizing firm's short-run cos...
Why do businesses look at the economic profit and loss when determining if they should stay in business? Why is it that firms maximize profits where MR = MC? Explain and give an example. Explain why economic profit provides a better measure of pro...
Why is the equality of marginal revenue (MR) and marginal cost (MC) essential for profit maximization? Why would a monopolist never set a price on a point in the inelastic portion of the demand curve? a. marginal revenue would be negative and therefore well below the ma...
Why is it impossible for a profit-maximizing monopolist to choose any price and any quantity it wishes? Explain why both monopolies and perfectly competitive firms produce the output where MR = MC. Since MR = MC for both monopolies and perfectly competitive firms, why...
Explain why any profit-maximizing firm produces at the output level where MC=MR. Why doesn't it produce more or less output? Explain why normal profit is an economic cost, but economic profit is not. Why is it that firms maximize profits where...
Assume that, TC = 10,000 MC = 0 TR = 70Q MR = 70 (a) What is the price of this good? (b) At what output level is profit maximized for this firm? (c) At what level of output is revenue maximized for this firm...
Explain why both monopolies and perfectly competitive firms produce the output where MR = MC. Since MR = MC for both monopolies and perfectly competitive firms, why is the profit-maximizing price bas Why is perfect competition relevant to the study of microeconomics?
Why is a monopolist not maximizing profit (and should decrease output level) when P=MC? Why does opportunity cost include implicit costs? Why does marginal utility become zero when the total utility is at its maximum? Why is the assumption of profit maximization sometimes referred to as ma...
Why is P=MC when the companies make max profit? What are the relationships between AR, average revenue, and MR, marginal revenue? Explain why firms stay in business in competitive markets if the economic profit is zero in the long run. Why does profit maximization ignore th...
Why are companies valued based on the revenue rather than the profit? Explain why economic profit provides a better measure of profit than accounting profit. Explain why all four market structures maximize profit at the point in which; mr=mc. Why don...