Question

For a monopoly, profit per unit of output is?

A-marginal revenue minus marginal cost

B-price minus average total cost

C-average total cost minus marginal revenue

D-price minus marginal revenue

E-total revenue minus total cost

Answer 1

E-complete sales minus whole cost

In economics, revenue maximization is the brief run or long run system wherein a company may assess the rate, enter, and output phases that result in the finest profit. Neoclassical economics, presently the mainstream strategy to microeconomics, more often than not items the company as maximizing revenue.

There are a number of views you will take on this quandary. First, considering that profit equals income minus fee, you will plot graphically every of the variables revenue and price as features of the extent of output and in finding the output degree that maximizes the difference (or this will also be completed with a table of values as a substitute of a graph). 2nd, if distinctive functional types are recognized for revenue and fee in phrases of output, you can actually use calculus to maximize revenue with admire to the output stage. Third, given that the primary order for the optimization equates marginal income and marginal fee, if marginal earnings and marginal fee capabilities in terms of output are immediately on hand you can actually equate these, utilizing both equations or a graph.

Fourth, rather than a perform giving the price of producing each talents output stage, the corporation can have input fee capabilities giving the rate of acquiring any quantity of every enter, along with a creation perform displaying how so much output outcome from using any combination of enter quantities. On this case you will use calculus to maximise revenue with appreciate to input utilization levels, subject to the enter cost services and the creation operate. The first order situation for every input equates the marginal earnings manufactured from the input (the increment to revenue from promoting the product brought about with the aid of an increment to the amount of the input used) to the marginal rate of the input.