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“Whichever way you choose to calculate the optimum selling price in the above example, do be aware that it occurs at the point where marginal revenue = marginal cost. You could be specifically asked to use this fact in the examination.”
it says the above in page 24, however when we solve the question, we see that we choose the price level after which the marginal cost is more than marginal revenue. as in we decided to use the selling price until where marginal revenue is more than marginal cost.
but in the above quoted text it says that mr = mc, isnt that incomplete? because based on the solution from the notes, we choose the price at which mr is greater than mc.
No it is not incomplete. Maximum profit occurs when marginal revenue is equal to the marginal cost.
I assume that you are referring to the example of page 23 – not page 24 – and this is tabular pricing where we are limited by the fact that the selling prices can only be in units of $0.50.
I do explain this in the free lectures.
It seems from your post that you might be using the lecture notes on their own without watching the lectures. The notes are lecture notes and it is in the lectures that I explain and expand on the notes – the notes by themselves are not enough.
If you are not watching the free lectures for any reason, then you must buy a Study Text from one of the ACCA approved publishers and study from there.
yes sir i have watched all the revision lectures
its just that it said “Whichever way you choose to calculate the optimum selling price in the above example” so i thought in the above example in tabular approach mr = mcmr = mc should occur to get maximum profit, but forgot that we were limited by the fact that selling prices can be in units of 0.50$
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