Practice - Profit Maximisation
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Practice Questions
Test your understanding with targeted questions
Define profit in terms of total revenue and total cost.
💡 Hint: What do we subtract from revenue to find profit?
What does MC stand for in profit maximization?
💡 Hint: Think about what cost refers to an additional unit.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What does profit maximization involve?
💡 Hint: Consider what is being increased to achieve profit.
True or False: In the long run, a firm can sustain operations if the price is less than average cost.
💡 Hint: Think about business sustainability over time.
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Challenge Problems
Push your limits with advanced challenges
If a firm has a total cost of Rs 100,000 producing 500 items and has a marginal cost of Rs 200 for the next item but is currently selling each item for Rs 250, should it increase production?
💡 Hint: Think about whether the selling price covers the marginal cost.
Consider a firm with fixed costs of Rs 30,000 and variable costs dependent on output. Discuss the impact of an increased price in a competitive market and how it will influence the firm’s decision-making.
💡 Hint: Consider how price changes affect cost recovery.
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