Principles of Microeconomics / Unit 9 MIC 0805 short lesson, about 20 seconds
Profit Maximization in the Short Run
Captions available
The idea
In the short run the firm behaves like a monopolist on its own demand curve: produce where marginal revenue equals marginal cost, read the price from demand, compare price with average cost.
In practice
The pizza shop sells forty a day at sixteen dollars and earns a profit.
Where people slip
Same three steps as monopoly; the difference arrives in the long run, when profit draws entry.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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