How is marginal analysis lead to profit-maximizing quantity, Managerial Economics

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How is marginal analysis lead to profit-maximizing quantity of output?

Marginal Analysis leads to Profit-Maximizing Quantity of Output:

The price-taking firm’s optimal output rule is about the price-taking firm’s profit is maximized through producing the quantity of output at that the marginal cost of the final unit produced is equivalent to the market price.

The marginal revenue curve demonstrates how marginal revenue varies by output varies.

1325_The Price-Taking Firm’s Profit-Maximizing Quantity of Output.png

The Price-Taking Firm’s Profit-Maximizing Quantity of Output

The profit-maximizing is a point where the marginal cost curve is crosses the marginal revenue curve that is a horizontal line at the market price.


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