In the end, there is only good economics and bad economics.
Q. When finding the profit, we find the area of the rectangle formed by the two prices correct?A: Yes, which is accomplished when using the profit formula: profit=(P-ATC)*Q
Q: How do you figure out what price a firm should set by looking at a graphwith MR, MC, ATC, etc.? A: Firms produce at the output where MR=MC. They then charge the price at that output level based on the firm's demand curve.
For 11.1 on the homework the question states that the oportunity cost is $7 per lesson, isn't that worse in every situation of lessons?
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Q. When finding the profit, we find the area of the rectangle formed
by the two prices correct?
A: Yes, which is accomplished when using the profit formula:
profit=(P-ATC)*Q
Q: How do you figure out what price a firm should set by looking at a graph
with MR, MC, ATC, etc.?
A: Firms produce at the output where MR=MC. They then charge the price at that output level based on the firm's demand curve.
For 11.1 on the homework the question states that the oportunity cost is $7 per lesson, isn't that worse in every situation of lessons?
Post a Comment