Because the primary goal of a "for profit" business is to make as much profit as possible or to maximize that profit, it should follow that the activities of the business would focus on efficiency and effectiveness of operations. Economists often put this into a graphical display whereby the dollar amount of profit is plotted against quantity of output overt time. It is theorized that the profit maximizing quantity of output is the point on the graph where marginal revenue equals marginal cost.
(A) Explain what is meant by marginal revenue. Choose a business and discuss the marginal revenue of that business.
(B) Explain what is meant by marginal cost. What does marginal cost mean in your life?