Wednesday, November 9, 2011

If i only have selling price, total revenue and Marginal revenue how would i get Marginal cost curve?

the profit maximizing price is always where marginal revenue equals marginal cost. If we ume that the firm is operating at the profit-max location then the selling price is is the marginal cost at that quantity. how you determine the mc curve from there is a bit tricky. if the cost curve is linear the mc at all quantities will be equal to this selling price.

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