Re: micro problems

Posted by Chocolate Frog on May 03, 2012; 6:56pm
URL: http://discussion-forum.276.s1.nabble.com/micro-problems-tp7523947p7524817.html

No, Neha, it will not, in general, be possible to determine the profit maximising level of output in this case. The simplest (counter)example to illustrate my point would be a cost function which increases linearly with output, i.e. one with a constant marginal cost. MC and MR will be equal at some level, but since MR is increasing in output, it would pay the producer to continue producing more units.