Textbook Notes (367,969)
Canada (161,538)
Economics (818)
ECON 2310 (47)
B Ferguson (11)
Chapter 9

Chapter 9- Profit Maximization.pdf

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ECON 2310
B Ferguson

Chapter 9- Profit Maximization October 29, 2013 10:51 AM Definitions Profit- is equal to a firm's revenue minus its costs Inverse Demand Function- describes how much the firm must charge to sell any given quantity of its product. It takes the form Marginal Revenue- a firm's marginal revenue at units equals the extra revenue produced by the marginal units sold, measured on a per unit basis Infrramarginal Units- the units the firm sells other than the marginal units Price Taker- a firm is a price taker when it can sell as much as it wants at some given price , but nothing at any higher price Supply Function- the supply function of a price taking firm tells us how much the firm wants to sell at each possible price . It is a function of the form Law of Supply- when the market price increases, the profit-maximizing sales quantity for a price-taking firm never decreases Findin
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