3 Rules of Production:
(applies to
all types of Competition)
- MR=MC determines
the Profit Maximizing Quantity of Production
(Output Level)
- At the Prof. Max. Quantity, find the Demand Curve and go over to Y axis for the Profit Max.
Price
- A Firm should Shut Down (Produce Zero Ouput)
if TR<TVC ( AR<AVC )