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Macroeconomics for Managers: Core Concepts
Marginal Cost Pricing
A fundamental principle in managerial economics focused on making production and pricing decisions by comparing the additional cost (MC) and additional revenue (MR) of one more unit. ✨
Article Points:
1
Marginal Cost (MC) is the cost of producing one additional unit.
2
Marginal Revenue (MR) is the revenue gained from selling one additional unit.
3
Firms maximize profit by producing at the quantity where MR = MC.
4
If MR > MC, produce more to increase profit.
5
If MR < MC, produce less to increase profit.
6
Essential for optimizing production levels, setting competitive prices, and efficient resource allocation.
Source:
Marginal Cost Pricing
Marginal Cost Pricing
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Source:
Marginal Cost Pricing
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