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Suppose a monopoly is operating in the short run. Under which of the following situations would it increase its per-period total profits by raising the price and reducing output?a. if it were producing a level of output such that MC > MRb. if it were producing a level of output such that MC < MRc. if it were producing a level of output such that MC = MRd. none of the above

Sagot :

According to the principle of profit maximization, marginal costs (MC) equal marginal revenue (MR), where MC stands for marginal expenses.

What is the theory of profit-maximizing?

  • According to the principle of profit maximization, marginal costs (MC) equal marginal revenue (MR), where MC stands for marginal expenses.
  • The conventional profit-maximizing theory allows for situations where it is both realistic and possible for a corporation to operate at a loss over the long term.
  • When their marginal price and marginal product are equal, all businesses maximize their profits. Additionally, the selling price that optimizes profits should be this sum of money.
  • In order to maximize profits, one must produce to the point where marginal cost equals marginal revenue. The marginal income of a perfectly aggressive firm is equal to the market price.
  • A competitive organization produces at the point of the lowest average total cost in long-run equilibrium. Companies will set the fee at the lowest common whole cost in a market with perfect competition.

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