Marginal Utility Theory, Product Differentiation, And Revenue/Profit Maximization

"Applying the concept of marginal utility theory, product differentiation, and profit maximization to specific events in an individual's daily life" [1] The concept of marginal utility is applied from three concepts at hand. The explanation is simple. According to Sloman and Sutcliffe, the concept of utility is directly related to the concept of satisfaction [2]. The satisfaction that people obtain from consumption is called utility. Well, when we consider the utility concept, we must first distinguish between total utility and marginal utility.

Maximizing profits: PC companies maximize profit by generating prices equal to marginal costs. A monopolist maximizes profit by making marginal return equal to marginal cost. The rules are not the same. The demand curve of the PC company is very flexible and flat. The demand curve is the same as the average income curve and price line. Since the average income curve is constant, the marginal yield curve is also constant and equal to the demand curve, and the average income is the same as the price (AR = TR / Q = P x Q / Q = P). Therefore, the price line is also the same as the demand curve. That is, D = AR = MR = P.

In perfect competition, profit maximization depends on the number of products they sell. The marginal cost of a single product unit product equals marginal revenue. The total income and total cost approach is to maximize profit. When cost is lowest, you can get the maximum profit only. Conceptual monopolistic competition is more realistic than perfect competition. Each company in the monopolistic competitive market has its own price policy. Another characteristic of monopolistic competition is that most things are uncertain. But they are rough alternatives to each other. In this case, the exclusive and perfect competition is characteristic of the presence of the seller. These companies did not produce a complete substitute. Otherwise, because each company's share of the monopolistic market as a whole is small, management of market prices is restricted.

Oligopolis determines the price of the item in the market. Products in this market form are uniform or different. Maximize profit by producing with marginal revenue equal to marginal cost. They have high entry barriers, the most important barriers are the use of strategic action by mature companies designed to eliminate patents, expensive and complex technologies, economies of scale, and emerging companies. A limited number of companies in this market form means that the activities of a company may affect the activities of other companies. Oligopolises fully understand the functions of their costs and demand, but they lack understanding of affiliates. Purchasers are incompletely understood about the cost, price and quality of products.