Get the answer of: What are the Two Rules of Profit Maximisation? A profit-maximising firm has to face two different but inter-related questions: (a) Should it produce at all? (This is a question relating to shutting down or closing down any operation of the business.) (b) If it is profitable to produce any positive quantity, what is the optimum output? [...]
In this article we will discuss when does the profit of a firm become maximum. Also learn about why is the equality of marginal revenue and marginal cost essential for profit maximisation in all types of markets. The basic objective of a firm under all types of market situation is the profit maximisation. Accordingly, a firm, whether competitive or monopolistic, [...]
In this article we will discuss about Taussig’s theory of profit. Also learn about its criticisms. According to rent theory supernormal profit is a surplus above the opportunity (transfer) cost of entrepreneurship. Therefore, it is comparable to economic rent which is also a surplus. According to the wage theory of profit, advanced by Taussig, profit is a type of wage. [...]