The deep state entered Americaâs national discourse in 2017 with the feeling of an already familiar character, ready to assume a starring role as hero or villainâdepending on how you feel about Trump.
If a firm produces past that point, then marginal revenue is less than marginal cost. This means that the firm is losing profit with each additional unit of output and it should produce less. Remember that a competitive firm has a flat MR curve which is equal to the market price.
In this case, the total revenue is $200, or $10*20. The total revenue from producing 21 units is $205. The marginal revenue is calculated as $5, or ($205 - $200)/(21-20). When marginal revenue and the marginal cost of production is equal, profit is maximized at that level of output and price. In terms of calculus, the relationship is stated as: dTR/dQ = dTC/dQ. For example, a toy company can sell 15 toys at $10 each.