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Homework answers / question archive / why profit maximization happens at the point where MR = MC, and not where MR is greater than MC
why profit maximization happens at the point where MR = MC, and not where MR is greater than MC
Profit maximization happens at the point where MR = MC, and not where MR is greater than MC because when MR is greater than MC than the income acquired from selling an added unit of output is exceptional than the expenses of manufacturing that unit. it means the corporation can grow up its gains by selling an extra unit of output. The firm can grow up its gains till it come up with the production level where marginal revenue and the marginal cost are similar.