ⓘ Marginal profit. In microeconomics, marginal profit is the increment to profit resulting from a unit or infinitessimal increment to the quantity of a product pr ..

                                     

ⓘ Marginal profit

In microeconomics, marginal profit is the increment to profit resulting from a unit or infinitessimal increment to the quantity of a product produced. Under the marginal approach to profit maximization, to maximize profits, a firm should continue to produce a good or service up to the point where marginal profit is zero. At any lesser quantity of output, marginal profit is positive and so profit can be increased by producing a greater amount; likewise, at any quantity of output greater than the one at which marginal profit equals zero, marginal profit is negative and so profit could be made higher by producing less.

Since profit is revenue minus cost, marginal profit equals marginal revenue minus marginal cost.

                                     
  • maximize profit with respect to the output level. Third, since the first order condition for the optimization equates marginal revenue and marginal cost
  • is that a firm maximizes profit by producing that quantity of output where marginal revenue equals marginal costs. The profit maximization issue can also
  • Cost - Volume - Profit Analysis Cost - sharing mechanism Economic surplus Marginal concepts Marginal factor cost Marginal product of labor Marginal revenue Merit
  • two curves marginal revenue and marginal cost respectively are equal. In interdependent markets, game theory must be used to derive a profit maximising
  • is the satisfaction or benefit derived by consuming a product thus the marginal utility of a goods or service is the change in the utility from an increase
  • assumption that the firm is profit - maximizing and thus would employ labor only up to the point that marginal labor costs equal the marginal revenue generated for
  • theory of interest and of profit in equilibrium based upon the interaction of diminishing marginal utility with diminishing marginal productivity of time and
  • The marginal efficiency of capital MEC is that rate of discount which would equate the price of a fixed capital asset with its present discounted value
  • There are several methods used to present a tax rate: statutory, average, marginal and effective. These rates can also be presented using different definitions
  • significantly higher than its marginal cost, allowing it to have an economic profit that is significantly higher than the normal profit that is typically found
  • variable costs One can think of contribution as the marginal contribution of a unit to the profit or contribution towards offsetting fixed costs
  • sum of factor incomes, as it is in national accounts, then the profit income the marginal product of capital generated can be related separately to the