Wednesday, August 10, 2011

Why PROFIT can be maximized when Marginal Revenue (MR) = Marginal Cost (MC)?

Anjaree is correct. Keep in mind marginal means "the next", i.e. IF, when MC=MR, a company were to sell "one more", then "profit" for that item would be 0. >>> It is critical to remember that marginal cost includes all costs, including implicit costs, of which "normal profit" is a component.

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