Principles of Microeconomics / Unit 7 MIC 0609 short lesson, about 20 seconds
Which Crossing Counts
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The idea
A U-shaped marginal cost curve can cross a price twice, once falling and once rising. Only the rising crossing is the profit-maximizing quantity.
In practice
At the falling crossing the next unit still earns more than it costs, so keep going.
Where people slip
Marginal cost must be rising through the price; a falling crossing is where losses are largest.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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