Profit maximization for the Perfectly Competitive Firm ◆ When Mr>MC, Q increase will increase profit ◆ When Mr<MC, 2 decrease will increase profit ◆ When mr=MC, economic profit is maximized
Profit Maximization for the Perfectly Competitive Firm When MR > MC, Q increase will increase profit When MR < MC, Q decrease will increase profit When MR = MC, economic profit is maximized
Profit maximization for the Perfectly Competitive Firm Revenue (Ss per year) TR Slope of TRE MR Output (units per year
Profit Maximization for the Perfectly Competitive Firm 0 Revenue ($s per year) Output (units per year) TR Slope of TR = MR
Profit maximization for the Perfectly Competitive Firm Cost s(per year) TC Slope of TC= Mc utput (units per year
0 Cost $ (per year) Output (units per year) Profit Maximization for the Perfectly Competitive Firm TC Slope of TC = MC
Profit maximization for the Perfectly Competitive Firm Cost Revenue Profit (Ss per year) A TR B q Output(units per year) Profit MR=MC
0 Cost, Revenue, Profit ($s per year) Output (units per year) TR TC A B Profit Maximization for the Perfectly Competitive Firm Profit q1 MR=MC
Profit maximization for the Perfectly Competitive Firm Cost Revenue Profit (Ss per year) TR Profits are maximized when MC= MR qa Output(units per year) Profit
0 Cost, Revenue, Profit ($s per year) Output (units per year) TR TC A B Profit Maximization for the Perfectly Competitive Firm Profit q2 q1 q3 Profits are maximized when MC = MR