At a price of $10, the marginal revenue of a monopolist is $6. if the marginal cost of production is $8, the monopolist should keep the price at same level in order to maximize profits.
For increasing the profits the monopolist should increase the marginal revenue to $8 so that the mr =mc.
Every firm follows the rule of profit maximization. In this rule marginal cost is equal to the marginal revenue and the MR intersects the MC curve the profit will be the maximum at this level.
The marginal cost of production and marginal revenue are the economic measures which are used to determine the amount of output and the price per unit of a product that will maximize profits.
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Quality value price reach consumer goods
Answer:
c. $240,000
Explanation:
Her economic profit is given by her revenue deducted by the explicit costs (I=$150,000) and implicit costs (opportunity cost).
Her monthly revenue is:
Her opportunity cost is:
Her economic profit is:
The answer is c. $240,000.
