Economics

1.

Economics
Nada Mohamed Saleh

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3.

Section 4
continue…

4.

Profit Maximization

5.

Profit Maximization
It depends on the type of Market:
1- Perfect competition
Example?
2- Monopoly
3- Oligopoly

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7.

Perfect competition
-
-
Firms are price takers
Firms have to decide the level of
inputs and outputs to use /produce.

8.

1- The profit-maximizing level of input
Using Marginal Analysis:
- Comparing the benefits and costs of a
decision incrementally, one unit at a time.

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Y = f (feed│ steers, labor, water ,medicine, hormones, ...).
X= input
Feed (bag)
0
1
2
3
4
5
6
7
8
Y= Output
Meat (kg)
0
10
30
60
80
90
96
98
96
APP = Y/X MPP= ∆Y/∆X
(kg/bag)
(kg/bag)
10
10
15
20
20
30
20
20
18
10
16
6
14
2
12
-2

10.