Marginal Analysis
T/F The term "marginal" refers to incremental changes either increasing or decreasing.
What is True?
What is Stage 1?
The factors you need to calculate Marginal Revenue.
What is Change in Total Revenue, and Change is TPP?
T/F Marginal Revenue and Marginal cost are equated to find the profit-maximizing input/output level.
What is True?
This is the change in total physical product divided by the change in input level.
What is Marginal Physical Product (MPP)?
You don't want to have your production in this stage.
What is Stage 3?
The change in cost from producing another unit of output.
What is Marginal Cost?
The Law that states that increasing inputs will yield decreasing outputs.
What is Law of Diminishing Marginal Returns?
Total physical product divided by input level.
What is Average Physical Product (APP)?
The stage where APP is above MPP but both are decreasing.
What is Stage 2?
MR and MC are used to find profit-maximization according to this rule.
What is the Decision Rule?
A comparison between TPP, APP, and MPP in order to find the point of profit maximization.
What is Graphical Analysis?
The greek symbol that represents "change".
What is Delta?
TPP does this in Stage 2
What is increases at a lower rate?
The point at which profit is maximized by comparing MR and MC.
What is where MR = MC (or just before)?
T/F Equal Marginal Principle applies only to purchased inputs.
What is False?
Total Physical Product: 45
Input level: 4
Calculate APP
What is 11.25?
In stage three Marginal Physical Product is...
What is Negative?
What is MPP within the profit-maximizing rule?
Provides the guidelines and rules to ensure that the allocation is done in such a way that overall profit is maximized from the use of any limited input.
What is Equal Marginal Principle?