change in benefit in response to a specific action
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marginal cost
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the cost associated with one additional unit of production
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marginal revenue
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the income received from selling one additional unit of a good or service
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maximize
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to make as large as possible
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profit
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income received from an economic action, minus the costs of taking the action
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revenue
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the total income received from an economic action
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To generate higher profit margins, producers must work to
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decrease their production costs
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In order to calculate marginal cost, producers must compare the difference in the cost of producing one unit to the cost of
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producing the next unit
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What is the difference between profit and revenue?
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Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.
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What is the difference between marginal cost and marginal revenue?
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Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good.
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Brenda's Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards?
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$3,000
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Profit equals the total amount of money made minus
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expenses
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What is the best definition of marginal benefit?
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the possible income from producing an additional item
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South Avenue Publishing produces self-help books. The company's profit is the
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money the company earns after paying all of its production costs
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What is the best definition of marginal cost?
a)the possible income from producing an additional item
b)the price of producing one additional unit of a good
c)the additional income gained from selling an additional good
d)the financial gain from business activity minus expenses
answer
b)the price of producing one additional unit of a good
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