Profit

25 July 2022
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7 test answers

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question
To generate higher profit margins, producers must work to
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decrease their production costs
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Producers must understand the marginal benefit of making an additional unit, which shows the
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possible gain
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What is the best definition of marginal revenue?
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the additional income gained from selling an additional good
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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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What is the best definition of marginal cost?
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the price of producing one additional unit of a good
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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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How can producers maximize their profit?
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1. they can work to decrease their marginal cost 2. they can rise prices to increase marginal revenue 3. they can keep marginal costs below marginal revenues