GENERAL KNOWLEDGE

Detailed explanation-1: -Thus, the firm will not produce that unit. Profit is maxmized at the level of output where the cost of producing an additional unit of output (MC) equals the revenue that would be received from that additional unit of output (MR).

Detailed explanation-2: -Profit maximisation is a process business firms undergo to ensure the best output and price levels are achieved in order to maximise its returns. Influential factors such as sale price, production cost and output levels are adjusted by the firm as a way of realising its profit goals.

Detailed explanation-3: -Profit maximization is assumed to be the dominant goal of a typical firm. This means selling a quantity of a good or service or fixing a price, where total revenue (TR) is at its greatest above total cost (TC).

Detailed explanation-4: -The cost price p, must be equal to MC. The marginal cost must be non-decreasing at q0. For the enterprise to continue to manufacture in the short run, the cost price must be greater than the average variable cost (p > AVC), whereas in the long run, the cost price must be greater than the average cost (p > AC).

Detailed explanation-5: -Profit maximization is the process by which a business arranges its prices and cost structure to achieve the highest possible profit. The central goal of the organization is to increase its profits.