Respuesta :
The earnings will be $200. It can be generated by means of deducting the average complete fee (ATC) of $8 from the common income of $10 and multiplying the end result with the output
How do you decide rate and output to maximize earnings in a flawlessly aggressive market?
To maximize profits, the firm must set marginal revenue equal to marginal cost. Given the fact that this association is running in a competitive market, the market rate it faces is equal to marginal revenue. Thus, the association ought to set the market rate equal to marginal cost to maximize its profits: 9 = three + 2q, or q = 3.
When marginal revenue is beneath marginal cost, the association is losing money, and consequently, it have to minimize its output. Profits are therefore maximized when the company chooses the degree of output where its marginal income equals its marginal cost.
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