In this video we will try to solve a question on the revenue maximization of a firm. .we are given a demand function at a cost function and we were told to find the level of output and price which maximizes the total revenue.
The goal of the firm is to maximise profit. Therefore, the firm would be in equilibrium only when it achieves profit maximisation. The total revenue (TR) function of the firm gives its total revenue as a function of the quantity of output sold (q), i.e., TR = TR(q).

The total cost (TC) function of the firm, on the other hand, gives us total cost as a function of the quantity of output produced (q), i.e., TC = TC(q).

There are two conditions for profit maximization
FIRST ORDER CONDITION
That is, if the firm is to obtain maximum profit, it would have to equate its MR and MC, or, it would have to remain at the point of intersection between its MR and MC curves.

SECOND ORDER CONDITION
The first order or the necessary condition for maximum profit is also the first order or the necessary condition for minimum profit. That is why there should be an additional condition that should be satisfied along with the FOC. This condition is called the second order condition (SOC) or the sufficient condition for profit maximisation.
according to the SOC for maximum profit under perfect competition, the firm’s MC curve should be upward sloping towards right at the MR = MC point (where the FOC for maximum profit has been satisfied)
This video will help you to crack any
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JAM ECONOMICS

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