The company wishes to maximize the total revenues. Can you comment without doing any calculations whether...

The company wishes to maximize the total revenues. Can you comment without doing any calculations whether the price would need to be higher or lower than the profit-maximizing price? Explain your answer (Make sure not to use any calculations/numbers to explain your answer).

Solutions

Expert Solution

A sales maximising firm will need to lower the its price as compared to profit maximising price.

In order to understand ,it will be necessary to know, what is profit maximising price.

PROFIT MAXIMISING PRICE---- It is also called equilibrium price .It is a price which gives maximum profits to the firm.

It occurs when a firm produces as much quantity of output where his marginal cost ( MC ) is equal to marginal revenue ( MR) i.e MR= MC.The price corresponding to this quantity is the profit maximising price.

SALES MAXIMISING PRICE -----It is a price ,the firm charges when it aims at maximising sales or revenue.It occurs when its marginal revenue is zero ,i.e MR = 0

The sales maximising price will be lower than profit maximising price

We can show it more clearly with the help of a diagram(given as above)

Rahul Sunny answered 1 month ago

Next > < Previous

Related Solutions

Without doing any calculations, arrange the elements in FeCO3 in order of decreasing mass percent composition....

Without doing any calculations, arrange the elements in FeCO3 in order of decreasing mass percent composition. (Highest to Lowest)

1. Without doing any calculations, choose the 0.12 M aqueous solutions with a pH of 2....

1. Without doing any calculations, choose the 0.12 M aqueous solutions with a pH of 2. (Select all that apply.) Mg(CH3COO)2 HNO2 NH4Cl NaF Ba(OH)2 NaHCO3 none of the above 2. Without doing any calculations, choose the 0.12 M aqueous solutions with a pH between 2 and 6. (Select all that apply.) Mg(CH3COO)2 HNO2 NH4Cl NaF Ba(OH)2 NaHCO3 none of the above

Without doing any calculations, determine the sign of Delta S(sys) and Delta S(surr) for the chemical...

Without doing any calculations, determine the sign of Delta S(sys) and Delta S(surr) for the chemical reaction below. A) CO2(g) ---> C(s) + O2(g) Delta H(rxn) = +393.5 kJ Explanation please. Also, predict under what temperature (all temperautes, low tempertures, or high temperatures or none) the reaction will be spontaneous.

A) Without doing any calculations (just compare the correct Ksp values) complete the following statements: 1....

A) Without doing any calculations (just compare the correct Ksp values) complete the following statements: 1. calcium sulfide is MORE soluble than ABCD? 2. calcium sulfide is LESS soluble than ABCD? A. MgCO3 B. CaCO3 C. Fe(OH)2 D. Pb(OH)2 B) For each of the salts on the left, match the salts on the right that can be compared directly, using Ksp values, to estimate solubilities. If more than one answer is correct, enter the letters without delimiting characters. 1. calcium...

Without doing detailed calculations, indicate which of the following electron transitions in the hydrogen atom results...

Without doing detailed calculations, indicate which of the following electron transitions in the hydrogen atom results in the emission of light of the longest wavelength. Explain why. a. from n = 1 to n = 2 b. from n = 4 to n = 3 c. from n = 1 to n = 6 d. from n = 3 to n = 2

A microbiologist wishes to determine whether there is any difference in the time it takes to...

A microbiologist wishes to determine whether there is any difference in the time it takes to make yogurt from two different starters: lactobacillus acidophilus (A) and bulgarius (B). Seven batches of yogurt were made with each of the starters. The table below shows the time, in hours, to make each batch. Assume that both sets of times may be considered to be random samples from normal populations. Determine whether the mean time taken to make yogurt is the same for...

Our class has 37 students. i. Without any calculations, what would you guess is the chance...

Our class has 37 students. i. Without any calculations, what would you guess is the chance that two people in our class share the same birthday? In other words, do you think it is likely that two people share a birthday? ii. How many possible pairs of students are there? iii. What is the probability that any random pair of students has the same birthday? iv. What is the probability that all of the pairs have different birthdays? v. So,...

A researcher wishes to see whether there is any difference in the average starting salary for...

A researcher wishes to see whether there is any difference in the average starting salary for a college graduate's first job after graduating with the degrees shown. She randomly sampled graduates in each degree and the results are listed. At cr = .10, can we conclude that there is a difference in the average starting salaries of these graduates? Economics 42 53 49 44 54 Medicine 69 54 58 64 56 History 35 40 53 42 X1= X2= X3= XGM=...

A researcher wishes to see whether there is any difference in the weight gains of athletes...

A researcher wishes to see whether there is any difference in the weight gains of athletes following one of three special diets. Athletes are randomly assigned to three groups and placed on the diet for 6 weeks. The weight gains (in pounds) are shown here. At α = 0.05, can the researcher conclude that there is a difference in the diets? Diet A Diet B Diet C Total 3 10 8 6 12 3 7 11 2 4 14 ...

Firm A begins the fiscal year without either a deferred tax asset or liability. Total revenues...

Firm A begins the fiscal year without either a deferred tax asset or liability. Total revenues under GAAP are $300M higher than under tax reporting. Total expenses (excluding the tax expense) under GAAP are $500M higher than under tax reporting. Assuming a tax rate of 20% and no permanent differences, will Firm A report a deferred tax asset or liability on the Balance Sheet at the end of the year and in what amount?

Subjects