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For maximum profit MC must equal to MR. Why this point is not explained in BPP Study text?Or tabular approach?
Marginal Cost is the cost generated by producing one extra unit, and Marginal Revenue is the revenue generated from producing that one extra unit.
This means that beyond this point there will be no profit incurred, so this is the point just after which the company will seize to earn profits.
Hope this helped a bit,
And it’s a part of pricing techniques and is examinable. And hasn’t been asked before so better be careful about this one ….
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can give me an exmaple to show the working?
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I agree that this theory has not been tested as yet and bpp does not cover this.
Pray that we will not be examined on this as it is not a common question.Think this or risk and uncertainty could come out.The latter the most likely.happy study 🙂The best place to find an example of it is in the course notes that are free on this website (and watch my free lecture that goes with it).
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Thanks John will do that 🙂
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