Difference between revisions of "Economics Discussion"
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(For model answers to the homework, see Economics Homework) |
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:Because all firms want to maximize profits, and profits are at their maximum when marginal profit = 0. But marginal profit (MP)= MR-MC, so when MP=0, then MR-MC=0, which means MR=MC. That is when total profits are at their maximum for a firm. | :Because all firms want to maximize profits, and profits are at their maximum when marginal profit = 0. But marginal profit (MP)= MR-MC, so when MP=0, then MR-MC=0, which means MR=MC. That is when total profits are at their maximum for a firm. | ||
| − | == | + | == Quizlet Cards == |
| + | Here are some quizlet cards for studying for the final exam/CLEP test. If you see a mistake in the cards, reply below and I'll fix it! :) | ||
| + | [http://quizlet.com/_eb9y9 Cost Measures in Perfect Competition] | ||
| + | |||
| + | [http://quizlet.com/_ebn2u Cost Measures in Monopolies/Monopolistic Competitions] | ||
== Topic 3 == | == Topic 3 == | ||
Revision as of 13:29, June 6, 2013
For model answers to the homework, see Economics Homework.
Topic 1
Why do all firms, including even monopolies always sell their products where marginal revenue (MR) equals marginal cost (MC): MR=MC?
- Because all firms want to maximize profits, and profits are at their maximum when marginal profit = 0. But marginal profit (MP)= MR-MC, so when MP=0, then MR-MC=0, which means MR=MC. That is when total profits are at their maximum for a firm.
Quizlet Cards
Here are some quizlet cards for studying for the final exam/CLEP test. If you see a mistake in the cards, reply below and I'll fix it! :)
Cost Measures in Perfect Competition
Cost Measures in Monopolies/Monopolistic Competitions