ECONOMICS
PROFIT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
They can work to increase their marginal cost.
|
|
|
They can work to decrease their marginal cost.
|
|
|
They can raise prices to increase marginal revenue.
|
|
|
The can lower prices to decrease marginal revenue.
|
|
|
They can keep marginal costs below marginal revenues.
|
Detailed explanation-1: -They can work to decrease their marginal cost. They can raise prices to increase marginal revenue. They can keep marginal costs below marginal revenues.
Detailed explanation-2: -Answer and Explanation: Producers can maximize their profit by ensuring that their incremental or marginal profit increases. The marginal profit is ascertained by deducting the marginal cost from the marginal revenue and hence, it can be increased by increasing the marginal revenue and decreasing the marginal costs.
Detailed explanation-3: -The marginal revenue is the additional revenue added by increasing the quantity. This is also known as the additional revenue “at the margin.” Therefore, profit is maximized when marginal cost equals marginal revenue which is the same as saying when marginal profit equals zero.
Detailed explanation-4: -The firm should increase output as long as marginal revenue exceeds marginal cost, and reduce output if marginal revenue is less than marginal cost. Profits are maximized when marginal revenue equals marginal cost.
Detailed explanation-5: -The profit-maximizing choice for a perfectly competitive firm will occur at the level of output where marginal revenue is equal to marginal cost-that is, where MR = MC.