Profit maximization under single pricing

Single-price searchers maximize profit by setting a uniform price where marginal revenue is equal to marginal cost.

Glossary:

profit maximization
In the short run with fixed costs, a firm maximizes economic profit by equating marginal revenue (MR) with marginal variable cost (MC) when MC is increasing. Marginal revenue is lower than price (i.e., MR < P) if the firm must lower the price for all units just to sell one more unit.

Topics:

Market Structure, Profit maximization

Keywords

diminishing returns, marginal cost, marginal revenue, MR=MC, price searcher, profit maximization, single pricing