Firm decision for output

Firm decision for output - Profit Maximizing (or loss...

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Economic Context Assume Competitive Market o Standardized Product o Firm output small relative to total market output (small market share) o Low barriers to entry Marginal Revenue Additional revenue received by selling another unit of output Change in Revenue / Change in Output
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Unformatted text preview: Profit Maximizing (or loss miimizing) Output Rule: Produce output until the last unit where MR > MC This rule always generates the best economic outcome for a firm Can determine on graph when making a profit when MR is above ATC...
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This note was uploaded on 03/30/2008 for the course AAEC 1006 taught by Professor Mjellerbrock during the Spring '07 term at Virginia Tech.

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