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Economics 3.2.1 - Coggle Diagram
Economics 3.2.1
profit max
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change in revenue from producing one more unit of a good is the change in total cost from producing an extra unit
If MR > MC, firm could raise profits by increasing output
if MR < MC, firm could raise profits by decreasing output
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higher profits can lead to dynamic efficiency and more innovation, reducing LR costs
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satisficing
Satisficing involves the owners of a business (shareholders) setting minimum acceptable levels
of achievement of either revenue or operating profits
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