Show normal profit equilibrium, Managerial Economics

Assignment Help:

Q. Show Normal profit equilibrium?

Normal Profits: With the condition of  MC = MR and MC cuts the MR from below, if E is the point of stable equilibrium, output of firm is OM. produce this output, firm incurs an average cost ME, whereas it earns average revenue, that is also equal to ME. So, we see that the firm just makes a normal profit - i.e., its AR = AC. Because the total revenue earned and total cost incurred at output OM is OPEM, firm earns a normal profit.

2181_Show Normal profit equilibrium.png

Figure: Normal profit equilibrium


Related Discussions:- Show normal profit equilibrium

Search and matching model, Search and Matching Model It  should  be  c...

Search and Matching Model It  should  be  clear  to  you  fiom  the  earlier section  that  there  are  a  variety  of models under the rubric of  search theory.  In  this sec

Functions or purposes of taxation, Functions or Purposes of Taxation T...

Functions or Purposes of Taxation The functions of taxation can be discussed from the activities of the government it is meant to achieve. These are: a.     Raise reven

Monetary theory, Monetary Theory We have seen that Schumpeter theory wh...

Monetary Theory We have seen that Schumpeter theory which runs in terms of innovations and technical change, is at best an incomplete explanation of trade cycle . there are eco

Presentation, to give presentation on the topic: shutdown and abandoned cos...

to give presentation on the topic: shutdown and abandoned cost analysis?

Marris Model, Explaination of the Marris Model

Explaination of the Marris Model

Break-even quantity., Bikes-for-two, Inc., produces tandem bicycles. Its co...

Bikes-for-two, Inc., produces tandem bicycles. Its costs have been analyzed as follows: VARIABLE COST Materials $30/unit Manufacturing labor 3 hours/unit ($8/hour) Assembly labor 1

Types of budgets, TYPES OF BUDGETS 1.     Deficit budget   If th...

TYPES OF BUDGETS 1.     Deficit budget   If the proposed expenditure is greater than the planned revenue from taxation and miscellaneous receipts, this is a budget defic

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd