ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -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.

Detailed explanation-3: -Producers maximize profit by expanding their production up to the point at which their marginal cost equals their marginal benefit, which is the market price.

Detailed explanation-4: -The profit-maximizing level of output is the output level at which marginal cost (MC) is equal to marginal revenue (MR). This means that the last unit produced cost an amount exactly equal to the amount earned by it.

Detailed explanation-5: -The profit-maximizing quantity will occur where MR = MC-or at the last possible point before marginal costs start exceeding marginal revenue. On Figure 8.6, MR = MC occurs at an output of 5. The monopolist will charge what the market is willing to pay.