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Rainbow [258]
3 years ago
7

Explain why it is true that for a firm in a perfectly competitive​ market, the​ profit-maximizing condition MR​ = MC is equivale

nt to the condition P​ = MC. When maximizing​ profits, MR​ = MC is equivalent to P​ = MC because _______
Business
1 answer:
saveliy_v [14]3 years ago
7 0

\bold{MR = P} is equivalent to both of the given conditions in a fully competitive market.

<u>Explanation: </u>

In profit maximization, MR = MC corresponds to P = MC since, for a fully competitive product, the marginal revenue curve is the same as its demand. If a company produces during this level, marginal income is lower than marginal cost.

This ensures that for each additional production unit, the company loses profit and should deliver less. MR > MC the company produces less and may increase income by higher output.

To sum up, MR > MC the company produces less and can make profit by increasing production MR < MC the company produces more and can earn a profit by reducing the output.

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Shackleford corporation net income this year is $800,000. The company generally retains 35% of net income for reinvestment. the
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A. $22.61

Explanation:

First,

find the growth rate(g);

g = ROE *retention  rate

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