Acton Institute Powerblog

Maximizing profit under competition

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Note: This is post #42 in a weekly video series on basic microeconomics.

In a competitive market, a company can’t control how much they charge for goods and services. So how do firms maximize profits when they don’t control prices? In this video by Marginal Revolution University, Alex Tabarrok defines profit, including how to calculate total revenue and total cost, and covers costs, variable costs, marginal revenue, and marginal cost.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: Introduction to the competitive firm

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

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