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...

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. However, if the company sells 16 units, the selling price falls to $9.50 each. The marginal revenue is $2, or ((16*9.50)-