positive level of output in the range where the marginal cost is falling? Give an explanation.
5 views
0 votes
0 votes
Will a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.
User Avatar
by
12.8k points

1 Answer

0 votes
0 votes
 
Best Answer
No, It isn't always feasible for any perfect aggressive company to provide a advantageous stage of output in a selection where MC is falling. that is because, in line with one of the situations of income maximization, MC curve need to be upward sloping or the slope of MC curve have to be superb at the equilibrium stage of output.

 Allow us to take an example: At point Z price is identical to MC, however MC is falling and is negatively sloped. For any degree of output greater than Oq0, the firm is facing fee > MC, which implies that the income may be maximized via growing the output level further.

Therefore, the factor 'E’ is the equilibrium point, where an earnings maximizing company could operate and produce gadgets of output and its earnings will be maximized.
User Avatar
by
12.8k points

Related questions

Puja Kumari Asked Dec 13, 2022
4 views
Puja Kumari Asked Dec 13, 2022
by Puja Kumari
12.8k points
1 answer
0 votes
0 votes
4 views
1 answer
0 votes
0 votes
6 views
1 answer
0 votes
0 votes
5 views
Puja Kumari Asked Dec 13, 2022
4 views
Puja Kumari Asked Dec 13, 2022
by Puja Kumari
12.8k points
1 answer
0 votes
0 votes
4 views
1 answer
0 votes
0 votes
5 views
1 answer
0 votes
0 votes
6 views
WELCOME TO ANSWER AVENUE, WHERE YOU CAN ASK QUESTIONS AND RECEIVE ANSWERS FROM OTHER MEMBERS OF THE COMMUNITY.

Categories