"BTW, a business's profits are considered maximize when 'the revenue from selling one more unit of output is exactly equal to the cost of producing that last unit of output.'"
From the link:
"In describing a producer optimum, we have defined the profit maximization condition with respect the variable factor input (labor) as:"
Please note on the graph that the revenue line is a straight 45 degree angle from the graph axis. IOW, there is a one-to-one relationship between price increases and revenue changes, which is to say that the elasticity of demand is ignored. That is because, as the above quote illustrates, this model is based on making labor the variable input factor and holding other factors constant.
IOW, this is a deliberately simplistic model to isolate a single variable and analyze it. This isn't the real world, nor is it intended to be.
This is coming from the same poster who just a couple of posts above made a comment about how FairTaxers don't understand economic principles. Then he posts a quote out of context and attributes relevence to this thread which clearly its author would not have given it.
Amazing. Such arrogance and incompetence combined. I would suggest you stick with graphic design, YN.
ANd he wonders why everything he posts is questioned and parsed.
You're kidding, right? This tells me it's been a really long time since you've opened up an economics book. That slope is for illustration only. That is very common when describing economic theory."In describing a producer optimum, we have defined the profit maximization condition with respect the variable factor input (labor) as:"Please note on the graph that the revenue line is a straight 45 degree angle from the graph axis. IOW, there is a one-to-one relationship between price increases and revenue changes
which is to say that the elasticity of demand is ignored.No, it says that demand is not a factor in profit maximization. That happens when marginal revenue equal marginal costs.
That is because, as the above quote illustrates, this model is based on making labor the variable input factor and holding other factors constant.The quote above discusses how they "defined the profit maximization condition with respect the variable factor input" when they were "describing a producer optimum" on a completely different page! The page I linked to page isn't discussing "variable factor inputs."