Practice - The Profit Maximisation Problem: Graphical Representation
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Practice Questions
Test your understanding with targeted questions
What does profit maximisation mean?
💡 Hint: Think about what profit means for a firm.
Define total revenue.
💡 Hint: Consider how it relates to price and quantity sold.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What must happen for a firm to maximise profit?
💡 Hint: Consider what happens at the point of profit maximisation.
True or False: The total revenue curve is upward sloping for a firm in perfect competition.
💡 Hint: Think about how total revenue is calculated.
2 more questions available
Challenge Problems
Push your limits with advanced challenges
A firm has a constant market price of Rs 50. If the firm's average variable cost at a production level of 30 units is Rs 45, what is the profit or loss incurred? Additionally, what should the firm do in the short run?
💡 Hint: Calculate TR and compare it with TVC.
Draw a graph for a firm where total costs are higher than total revenue at an output of 20 units. What does the firm need to do?
💡 Hint: Identify the profit area in relation to total revenue and total cost.
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