Question

From an economic perspective, a company's profit-maximizing quantity is found where?

Answer 1

An enterprise's profit-maximizing amount is discovered where the marginal revenue curve intersects with the marginal fee curve.

In economics, profit maximization is the quick run or long run technique by way of which a firm can also decide the fee, input, and output stages that cause the best profit. Neoclassical economics, presently the mainstream approach to microeconomics, usually fashions the company as maximizing profit. The income-maximizing quantity is the only at which the marginal sales of the final unit turned into exactly the same as the marginal value. any other way of placing that is that the amount at which the marginal cost curve intersects the marginal sales curve. generating any more or less might lower earnings.

Marginal sales (MR) is the growth in sales that effects by the sale of one additional unit of output. while marginal revenue can stay consistent over a positive stage of output, it follows the law of diminishing returns and could finally gradually down as the output level will increase. To calculate marginal sales, you take the total alternate in revenue and then divide that through the alternate within the number of devices sold. The marginal sales method is marginal sales = alternate in total sales/alternate in output.

The marginal price curve usually intersects the average total value curve at its lowest factor due to the fact the marginal price of making the subsequent unit of output will continually have an effect on the average general price. As a result, as long as the marginal fee is less than the common overall price, the common overall fee will fall.

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