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SHORT-RUN EQUILIBRIUM
All firms are assumed to aim at maximizing profits or minimizing losses. The monopolist controls his output or price, but not both.
The monopoly maximizes profits where: MR = MC (the necessary condition of profit maximisation)
He cannot produce at less than Qo because MR will be greater than MC. The monopolist will determine his output at Q Xo and set the price at Po and his total Revenue is OQo X OPo and the to total cost will be OCo X bQo and abnormal profits Po CO AB
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if Q=120-2p is the equation for demand curve, find the compounding total, marginal and average revenue function
Another vital relationship that is often referred to in economic analysis is the relationship between consumption expenditure andprice elasticity. From the law of demand, we know t
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define scarcity and opportunity cost..
State about Production theory Production theory assists in determining the size of firm and level of production. It clarifies the relationship between marginal and average cost
A cut in price from Br 1.50 to Br 1.20 leads demand for a product rise by 10% What would the price elastic of demand before this product ? interpret the result by identifying the t
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