Egt1 Task 1

EGT1 Task 1 In this paper I am going to define a few common sparing terms and explain their relationships to other economic terms. I testament also explain how increase maximizing watertights restore their optimal level of step to the foreput and how a profit maximizing bulletproof will react to different levels of bare(a) taxation. Marginal tax income is the spare revenue that will be made by a firm when the firm sells one surplus building block of a product.Total revenue is scarcely the sum of a firms sales of a specified quantity of a particular product. So, while marginal revenue is telling how such(prenominal) plain money selling each additional product will make a firm, total revenue is telling how much the firm will make by selling a given quantity. Marginal monetary value is the what it will cost a firm to produce one more unit of product. Total cost is the total economic cost a firm incurs for producing a given quantity of a certain product.Profit is hardl y the a firms total revenue after the firm pays for its operating costs, and profit maximization is the the course of action that a firm takes to determine how much they will produce and what they will charge per unit of production in order to provide the firm with the greatest possible profit in either the long run or the short run while frame of a firm.A profit-maximizing firm determines its optimal level of out put by finding the point where marginal cost is touch to marginal revenue. Meaning that, when the cost of producing an additional, or extra, unit of product is come to to the amount of extra revenue. This point is the peak of the firms profit maximizing potential. An additional unit of product after this point will only contribute in costing the firm money, rendering marginal revenue as zero or negative.If a profit maximizing firms marginal revenue is greater than marginal cost, the firm will continue adding another unit of product to production as long as marginal rev enue is greater than or adequate to marginal cost. If a profit-maximizing firms marginal revenue is less than marginal cost, the firm would need to reduce its siding to the point of optimal output where marginal revenue is again equal to marginal cost. EGT1 Task 1 References McConnell, C. R. , Brue, S. L. , & Flynn, S. M. (2012). Economics principles, problems, and policies. New York McGraw-Hill.