MR=MC Is The Only Rule That Matters
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MR=MC Is The Only Rule That Matters
Most people think profit maximization is complicated. It isn’t. It comes down to one condition: MR = MC. Marginal revenue is what you earn from selling one more unit. Marginal cost is what it costs to produce that unit. * If MR bigger MC →you’re leaving profit on the table * If MC bigger MR → you’re destroying profit So firms adjust ...
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