A rational business's main goal is always to maximize profits. As complicated as business processes can be, the end goal always remains reaching the maximum profit. There are many ways a company has ...

Learn how monopolies maximize profits by equating marginal cost and revenue. Discover the economic principles guiding price and output decisions in monopoly markets.

Marginal revenue and marginal cost are essential calculations that help companies analyze and maximize their profits. Taken together, marginal revenue and marginal cost are used to determine how many ...

Marginal cost helps predict company profit by analyzing cost to produce extra units. Investors use the gap between marginal cost and revenue to assess profitability. Technology firms, due to low ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Timothy Li is a consultant, accountant, and ...

Marginal revenue measures extra income from producing one more unit. Compare marginal revenue and cost to decide on production adjustments. Track marginal revenue changes to set optimal production and ...

The concept of ‘pay for productivity’ is well documented in microeconomic theory. According to this concept, the labour market is in equilibrium when the marginal cost (extra cost) of employing an ...

Much economic theory is based not on marginal analysis of totals but on analyzing the changes caused by increasing or decreasing those totals. Marginal cost is the increase in total costs resulting ...

Marginal cost refers to the change in total cost arising from the production of one additional unit. For example, in a manufacturing firm, the marginal cost will give a measure of the change in total ...