Negative profit, Microeconomics

Assignment Help:

Negative profit 

  • FC + VC > R(q)
  • MR > MC

   Indicates higher profit at the higher output

- Question: Why is profit negative when the output is zero?

- Output levels: q0 -  q*

  • R(q)> C(q)
  • MR > MC

  Indicates higher profit at the higher output while Profit is increasing

- Output level: q*

  • R(q)= C(q)
  • MR = MC
  • Profit is maximized
  • Question

-Why is profit reduced while producing more or less than q*? 

- Output levels beyond q*

  • R(q)> C(q)
  • MC > MR
  • Profit is decreasing

* Thus, it can be said:

- Profits can be maximized when MC = MR.
2450_negative profit.png

  : when maximized   are   Profits


Related Discussions:- Negative profit

Explain about gross domestic product, Q. Explain about Gross Domestic Produ...

Q. Explain about Gross Domestic Product? Gross Domestic Product:Value of all the services and goods produced for money in an economy, evaluated at their market prices. Excludes

Law of mass action, Law of mass action states that at a constant temperatur...

Law of mass action states that at a constant temperature rate of a chemical reaction is directly proportional to product of active masses of the reactants raised to the power equal

Labour extraction, Labour Extraction: Most employees under capitalism are p...

Labour Extraction: Most employees under capitalism are paid according to time they spend at work. Though employers then face a challenge to extract genuine labour effort from their

How change in the exchange rate affect the domestic economy, How might a ch...

How might a change in the exchange rate affect the domestic economy of the country? A change in the exchange rate - ceteris paribus - will alter relative prices between trading

., wHEN WAGE IS $6.05, HOW MANY HOURS ARE WORKED A WEEK?

wHEN WAGE IS $6.05, HOW MANY HOURS ARE WORKED A WEEK?

Elasticity of demand, Elasticity of Demand This is a measure of how re...

Elasticity of Demand This is a measure of how responsive the sales volume of goods is to changes in that product's price, equal to the marginal change in sales, divided by the

Current cropping pattern - crop patterns , Current Cropping Pattern: ...

Current Cropping Pattern: It is evident from these data that foodgrains constitute the most dominant  crop group that is cultivated in India. It is estimated that total croppe

Rational decision, what is rational decision and why it requires one''s cho...

what is rational decision and why it requires one''s choices be consistent with one''s goals?

Demand for the big mac on the rise, illustrate and explain the changing dem...

illustrate and explain the changing demand for big mac using the indifference curve and budget line

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd