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  2. Cost curve - Wikipedia

    en.wikipedia.org/wiki/Cost_curve

    The marginal cost is shown in relation to marginal revenue (MR), the incremental amount of sales revenue that an additional unit of the product or service will bring to the firm. This shape of the marginal cost curve is directly attributable to increasing, then decreasing marginal returns (and the law of diminishing marginal returns).

  3. Marginal revenue - Wikipedia

    en.wikipedia.org/wiki/Marginal_revenue

    [1] [3] [8] The marginal revenue (the increase in total revenue) is the price the firm gets on the additional unit sold, less the revenue lost by reducing the price on all other units that were sold prior to the decrease in price. Marginal revenue is the concept of a firm sacrificing the opportunity to sell the current output at a certain price ...

  4. Total cost - Wikipedia

    en.wikipedia.org/wiki/Total_cost

    The additional total cost of one additional unit of production is called marginal cost. The marginal cost can also be calculated by finding the derivative of total cost or variable cost. Either of these derivatives work because the total cost includes variable cost and fixed cost, but fixed cost is a constant with a derivative of 0. The total ...

  5. Profit maximization - Wikipedia

    en.wikipedia.org/wiki/Profit_maximization

    Marginal cost and marginal revenue, depending on whether the calculus approach is taken or not, are defined as either the change in cost or revenue as each additional unit is produced or the derivative of cost or revenue with respect to the quantity of output. For instance, taking the first definition, if it costs a firm $400 to produce 5 units ...

  6. Economic equilibrium - Wikipedia

    en.wikipedia.org/wiki/Economic_equilibrium

    In a monopoly, marginal revenue (MR) equals marginal cost (MC). The equilibrium quantity is obtained from where MR and MC intersect and the equilibrium price can be found on the demand curve where MR = MC. Property P1 is not satisfied because the amount demand and the amount supplied at the equilibrium price are not equal.

  7. Inverse demand function - Wikipedia

    en.wikipedia.org/wiki/Inverse_demand_function

    The marginal revenue function has twice the slope of the inverse demand function. [9] The marginal revenue function is below the inverse demand function at every positive quantity. [10] The inverse demand function can be used to derive the total and marginal revenue functions. Total revenue equals price, P, times quantity, Q, or TR = P×Q.

  8. Cost–volume–profit analysis - Wikipedia

    en.wikipedia.org/wiki/Cost–volume–profit...

    The assumptions of the CVP model yield the following linear equations for total costs and total revenue (sales): Total costs = fixed costs + (unit variable cost × number of units) Total revenue = sales price × number of unit. These are linear because of the assumptions of constant costs and prices, and there is no distinction between units ...

  9. Monopolistic competition - Wikipedia

    en.wikipedia.org/wiki/Monopolistic_competition

    The company is able to collect a price based on the average revenue (AR) curve. The difference between the company's average revenue and average cost, multiplied by the quantity sold (Qs), gives the total profit. A short-run monopolistic competition equilibrium graph has the same properties of a monopoly equilibrium graph.