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    Optimal Output for Short-Run Profit Maximization

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    Why is the optimal level of output for short-run profit maximization equal to that level where marginal revenue equals marginal cost? What is the mechanism that will push firms to this level of output?

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    https://brainmass.com/economics/output-and-costs/optimal-output-short-run-profit-maximization-488756

    Solution Preview

    In order to maximize profit, a company will set production at the quantity where marginal revenue equals marginal cost. Marginal revenue is the additional revenue a firm will receive from producing one additional good. Marginal cost is the additional cost a firm will ...

    Solution Summary

    The solution discusses why the optimal level of output for short-run profit maximization equal to that level where marginal revenue equals marginal cost

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