Examlex
Provide three categories of cognitive errors when making investment decisions. Expand on each category.
Profit-maximizing Rule
The principle that firms maximize their profits by producing at a level where marginal costs equal marginal revenues.
Marginal Revenue
The increased earnings a business obtains from the sale of one extra item or service.
Marginal Cost
The increase in total cost that arises from producing one additional unit of a product.
Output
The quantity of goods or services produced in a given time period by a firm, industry, or country.
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