Naked Economics Summary Chapter 14
Chapter 14 reintroduces the concept of competitive market by revisiting the definition of market from early chapters and incorporate these concepts with with production function from chapter 13. From there, the chapter introduces new portions of production function which include average revenue and marginal revenue. These new elements in production function allow us to calculate for profit maximization for the firm.
While the calculation involved in this chapter is the same with the production function introduced in the last chapter, measuring profit using the graph is much more complicated. Also, as long as total revenue is more than variable cost, a firm should not shut down? What happen if TR=VC? The chapter is very calculation heavy and
While the calculation involved in this chapter is the same with the production function introduced in the last chapter, measuring profit using the graph is much more complicated. Also, as long as total revenue is more than variable cost, a firm should not shut down? What happen if TR=VC? The chapter is very calculation heavy and