The Company’s Supply Function

Svend Rasmussen ()
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Svend Rasmussen: University of Copenhagen

Chapter 9 in Production Economics, 2013, pp 89-93 from Springer

Abstract: Abstract As described in Chap. 4, the company maximises its profit (profit maximisation) if production is expanded to the point where the marginal cost (i.e. the incremental cost of producing one more unit) is precisely equal to the product price. The product price is in fact equal to the additional revenue achieved from selling one more product unit. The criterion for profit maximisation can therefore also be expressed as the point where the marginal cost is equal to the marginal revenue.

Keywords: Supply Function; Marginal Revenue; Average Variable Cost Curve; ATC Curve; Marginal Cost Curve (MC) (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/978-3-642-30200-8_9

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