- This topic has 3 replies, 2 voices, and was last updated 8 months ago by
.
- Posts
Hi,
This is tabular approach for finding the optimum profit so here we should see the highest profit form producing and selling different units
Do we have to see that MR=MC or it not required
e.g for the 4 batches (the optimum) in this question the profit is 14400 but the marginal revenue is 4000 and marginal cost is 2200
So even the profit is the optimum but about the Idea of MR=MC
Thanks,
In the context of the tabular approach for finding the optimum profit, it is not strictly necessary to see that MR=MC.
The tabular approach involves calculating the profit for different quantities and identifying the quantity that yields the highest profit.In your example, even though the profit is optimum at 4 batches with a profit of $14,400, the marginal revenue (MR) is $4,000 and the marginal cost (MC) is $2,200. This indicates that MR does not equal MC at this point.
The key point is that the tabular approach focuses on the highest profit rather than ensuring MR=MC. The concept of MR=MC is more relevant in theoretical and formula-based approaches to determine the point of maximum profit.
- You must be logged in to reply to this topic.