MGEA02H3 Lecture Notes - Lecture 14: Fixed Cost, Wage Labour, Marginal Product
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MGEA02H3 Full Course Notes
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Mgea02h3 lecture 14 maximizing in a perfect competition. Lecture 14 will also cover chapter 12 of the microeconomics textbook. The focus of this lecture is to delve into the maximization of perfectly competing functions. To find the maximizing profit in a perfectly competitive market, the following condition is necessary and must be in effect: profit, , must equal the total revenue the total cost. When wanting to look at how profit changes with respect to quantity, (cid:449)e(cid:859)(cid:396)e (cid:396)eally deali(cid:374)g (cid:449)ith the fu(cid:374)(cid:272)tio(cid:374)(cid:859)s slope. We want to change the equation above to look at the change in profit divided by the change in quantity. These slopes are referred to as the marginal curves: in in quantity = ( in total revenue i(cid:374) (cid:395)ua(cid:374)tity(cid:895) ( in total cost in quantity) In simpler terms, the marginal net revenue = the marginal revenue the marginal cost. The firm will continue to produce if the marginal revenue is greater than the marginal cost.