How do you calculate profit-maximizing output?
How do you calculate profit-maximizing output?
The profit-maximizing choice for the monopoly will be to produce at the quantity where marginal revenue is equal to marginal cost: that is, MR = MC. If the monopoly produces a lower quantity, then MR > MC at those levels of output, and the firm can make higher profits by expanding output.
What is the firm’s profit-maximizing quantity of output?
Profit is maxmized at the level of output where the cost of producing an additional unit of output (MC) equals the revenue that would be received from that additional unit of output (MR).
Which of the following is an argument in favor of a competitive market structure rather than a monopoly?
Which of the following is an argument in favor of a competitive market structure rather than monopoly? Monopolies produce less at a higher price than competitive markets, ceteris paribus.
Which of the following rules is satisfied when a monopoly maximizes profits quizlet?
Which of the following rules is satisfied when a monopoly maximizes profits? MR = MC.
How do you calculate total profit?
When calculating profit for one item, the profit formula is simple enough: profit = price – cost . total profit = unit price * quantity – unit cost * quantity .
What is the monopolist’s profit at the profit maximizing level of output?
The monopolist’s profit maximizing level of output is found by equating its marginal revenue with its marginal cost, which is the same profit maximizing condition that a perfectly competitive firm uses to determine its equilibrium level of output.
What is the firm’s profit-maximizing quantity of output quizlet?
The profit-maximizing quantity is the one at which the marginal revenue of the last unit was exactly equal to the marginal cost. Another way of putting this is that it’s quantity at which the marginal cost curve intersects the marginal revenue curve. Producing any more or less would decrease profits.
What is the firm’s profit-maximizing quantity of output Q1?
Terms in this set (15) Q1 corresponds to the quantity at which marginal revenue equals marginal cost. This profit-maximizing rule, MR=MC, applies to all firms, whether pure competition, monopoly, monopolistic competition, or oligopoly, as long as producing is preferable to shutting down.
Which of the following is true for perfect competition but not true for monopolistic competition and monopoly?
Which of the following is true of perfect competition but is NOT true of monopolistic competition? The firm will produce at a point where price equals marginal cost. What accounts for the fact that profit is zero in the long-run equilibrium in monopolistic competition? There are no barriers to the entry of new firms.
How does a monopoly maximize profit?
Which of the following is true about the output level where marginal revenue equals marginal cost?
Which of the following is true about the output level where marginal revenue equals marginal cost? The firm is maximizing profit.
