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Unformatted text preview: 2. Threats a. Like threatening other companies that your company will under cut their prices Max Profit Profit is difference between total revenue - total cost ( TR- TC) Marginal revenue = change in TR/ change in Q Marginal Cost = change in TC / change in Q If MR> MC then Q increase maximizes profit If MR<MC then Q down to max profit IF MR= MC then no change THESE RULES ARE TRUE FOR ALL FIRMS For Perfect Competition MR=MC is also where P=MC because MR=P for perfect competition...
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