Changes

*MC is the difference in cost between the specified Q and the good produced before it

*MC is the difference in cost between the specified Q and the good produced before it

In perfect competition, firms sell more and more Q until MR (marginal revenue) falls to the level of MC (marginal cost).  Stated another way, firms sell at the point where MR = MC.  Do not confuse MC with AVC; there are different concepts and it is tricky to relate one to the other.  MC does equal AVC for the first unit produced (Q=1), but probably not for any other units.  In addition, the difference between TVC's for unit Q and Q-1 is equal to the MC, and from that you can derive a relationship between AVC and MC (see honors analysis below).

In perfect competition, firms sell more and more Q until MR (marginal revenue) falls to the level of MC (marginal cost).  Stated another way, firms sell at the point where MR = MC.  Do not confuse MC with AVC; there are different concepts and it is tricky to relate one to the other.  MC does equal AVC for the first unit produced (Q=1), but probably not for any other units.

Master the above and you will both ace exams and be able to run a successful business.  Experienced business managers state that profitability is achieved primarily by reducing expenses.  This has certainly been true for Wal-Mart.  It is constantly driving costs down with its suppliers.  Remember: a penny saved is a penny earned.  Actually, due to taxes, saving a penny is sometimes worth more than a penny earned.

Master the above and you will both ace exams and be able to run a successful business.  Experienced business managers state that profitability is achieved primarily by reducing expenses.  This has certainly been true for Wal-Mart.  It is constantly driving costs down with its suppliers.  Remember: a penny saved is a penny earned.  Actually, due to taxes, saving a penny is sometimes worth more than a penny earned.