Using the Language of Calculus to Explain the Following Economic

question 38

Essay

Using the language of calculus to explain the following economic principles for output price decisions.(a) Maximum profit requires the firm to choose the level of output at which marginal revenue is equal to marginal cost.(b) A change in fixed cost will not change the profit maximizing level of output.(c) It may pay a firm to expand its output if it is selling at a price greater than marginal cost, even if that price happens to be below average cost.

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Definitions:

Stockholders' Equity Accounts

Accounts on a company's balance sheet that represent the ownership interest of shareholders, including common stock, retained earnings, and additional paid-in capital.

Credits

Accounting entries that increase liabilities or equity accounts, or decrease asset or expense accounts, reflecting the sources of the value in the transaction.

Journalizing

The process of recording transactions in the journal in chronological order.

Fraudulent Activity

Intentional deceit or trickery used to gain some unfair or dishonest advantage, often involving financial transactions.