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Marginal Revenue, Marginal Cost & Profit Maximization
* Determining profit maximizing level of output
- Profit (π ) = Total Revenue - Total Cost
- Total Revenue (R) = Pq
- Total Cost (C) = Cq
- Therefore:
* Marginal revenue is additional revenue from producing one more unit of output.
* Marginal cost is additional cost from generating one more unit of output. * Comparing R(q) and C(q)
- Output levels: 0- q0:
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2ALBr3+3K2so4--->6KBr+1Al2(so4)3
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