Economics Discussion

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, please reply below so they can be corrected. :)

Cost Measures in Perfect Competition

Cost Measures in Monopolies/Monopolistic Competitions

Comments:

Terrific!