in the following equation , what does uc stand for ?p=mc+uc
Answers
Answer:
When do we use P=MC, and when do we use MC=MR in economics?
Apart from what others have answered here, P=MC also means allocative efficiency which means whatever the quantity of goods and and services are demanded by the society, the same is supplied by the firm. And this happens only in perfect competition.
MC = MR is like a condition/criteria to decide the amount of goods and services that a profit maximising firm would produce. In other words, a profit maximising firm would determine its output where MC =MR. Though it's a profit maximising condition, it is not an allocatively efficient situation in imperfect competition.
For example, a monopoly firm would determine its level of output where MC = MR but that does not mean that it produces amount of goods and services that society demands
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Answer:
The equilibrium condition for a worth taking firm, manufacturing reproducible
goods: P = Mc, for every amount. If P > MC, the firm can increase
production to maximise profit. however within the case of the firm extracting
exhaustible resources such behaviour of equation P = Mc implies extraction of
more stocks than what's profitable.
Thus, rather than the same old potency condition P = Mc, we need to
define the condition for optimum extraction at every amount of your time for a
competitive resource owner firm as: P = AMC = Mc + UC, wherever AMC is
the increased price.
UC stands for User price.
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