Asked by
Sahil Ranjan
on Nov 04, 2024
Verified
If price is above average total cost at the output where marginal revenue equals marginal cost, a firm will earn positive economic profits.
Average Total Cost
The total cost of production (fixed and variable costs combined) divided by the total quantity produced, indicating the cost per unit of product.
Marginal Revenue
The additional income received from selling one more unit of a good or service.
- Understand the role of average and marginal costs in determining production levels and profitability.
- Comprehend the association among price, marginal revenue, and optimal production quantities.
Verified Answer
JT
Learning Objectives
- Understand the role of average and marginal costs in determining production levels and profitability.
- Comprehend the association among price, marginal revenue, and optimal production quantities.
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