what is the profit-maximizing level of output course hero

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How do you find the profit maximizing level of output?

What is the profit-maximizing level of output? In the graph above, the firm will sell its output at a price of? In the graph above, the firm will be: a. earning positive profit b. earning a loss and should shut down. c. Earning a loss but should stay open.

What is the pro profit maximization rule in economics?

Jan 26, 2013 · 9 What is the profit maximizing level of output and how much daily profit will. 9 what is the profit maximizing level of output and. School Texas A&M University; Course Title ECON 202; Type. Notes. Uploaded By ej380. Pages 5 Ratings 85% (26) 22 out of 26 people found this document helpful;

What is the difference between profit maximization and perfectly competitive?

Consider the monopolist described in the Figure 10.3. If the firm engages in profit- maximizing behavior, economic profit per unit of output will be: a. 0 b. P2 c. P4minus P d. P5minus P2 4. a. 0. 29.Price discrimination is best described as a monopolist: a. selling a product at the fixed market determined price. b.

Does a monopolist have a profit maximizing level of output?

What are all the different ways the profit maximizing level of output can be described? Answer: total, max , large ----> Increasing The profit maximizing level of output occurs where MR=MC, which means that the slope of the total revenue curve equals the slope of the total cost curve.

What is the profit maximizing level of output?

A manager maximizes profit when the value of the last unit of product (marginal revenue) equals the cost of producing the last unit of production (marginal cost). Maximum profit is the level of output where MC equals MR.

How do you find the maximizing output level?

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 profit maximizing choice for perfectly competitive firms?

The profit-maximizing choice for a perfectly competitive firm will occur where marginal revenue is equal to marginal cost—that is, where MR = MC.

What is a marginal revenue curve?

The marginal revenue curve is a horizontal line at the market price, implying perfectly elastic demand and is equal to the demand curve. Under monopoly, one firm is a sole seller in the market with a differentiated product.

What is the profit-maximizing level of output quizlet?

The profit maximizing level of output point is where the marginal revenue equals total cost. The revenue is greater than its variable costs ($900 > $800) so it should continue to produce! The profit maximizing level of output point is where the marginal revenue equals total cost.

What is the monopolist's profit at the profit-maximizing level of output quizlet?

A monopolist maximizes its profits by producing to the point at which marginal revenue equals marginal cost. The monopolist then charges the maximum price for this amount of output, which is the price that consumers are willing to pay for that quantity of output.

What is profit maximization of the firm?

In economics, profit maximization is the short run or long run process by which a firm may determine the price, input and output levels that lead to the highest profit. Neoclassical economics, currently the mainstream approach to microeconomics, usually models the firm as maximizing profit.

What is the profit-maximizing rule?

In economics, the profit maximization rule is represented as MC = MR, where MC stands for marginal costs, and MR stands for marginal revenue. Companies are best able to maximize their profits when marginal costs -- the change in costs caused by making a new item -- are equal to marginal revenues.

What is the profit-maximizing choice for perfectly competitive firms quizlet?

To maximize profits, a perfectly competitive firm should produce where marginal: cost equals total revenue.

How is the profit maximizing level of output determined in the monopoly?

Since there is no competition in a monopolistic market, a monopolist can control the price and the quantity demanded. The level of output that maximizes a monopoly's profit is calculated by equating its marginal cost to its marginal revenue.

What is profit maximizing price and quantity?

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.

How do you find profit in economics?

Economic Profit = Total Revenue – Explicit Costs – Implicit Costs

Economic Profit = $500,000 – $435,000 – $60,000.
Economic Profit = $5,000.

What is the profit maximization rule?

The Profit Maximization Rule states that i f a firm chooses to maximize its profits, it must choose that level of output where Marginal Cost (MC) is equal to Marginal Revenue (MR) and the Marginal Cost curve is rising. In other words, it must produce at a level where MC = MR.

When did airlines decide to fly additional routes?

In the early 1960s and before , airlines typically decided to fly additional routes by asking whether the extra revenue from a flight (the Marginal Revenue) was higher than the per-flight cost of the flight.

Who is Prateek Agarwal?

Prateek Agarwal’s passion for economics began during his undergrad career at USC, where he studied economics and business. He started Intelligent Economist in 2011 as a way of teaching current and fellow students about the intricacies of the subject. Since then he has researched the field extensively and has published over 200 articles.