Influential factors such as sale price, production cost and output levels are adjusted by the firm as a way of realising its profit goals. Profit maximisation is a process business firms undergo to ensure the best output and price levels are achieved in order to maximise its returns. For the enterprise to continue to manufacture in the short run, the cost price must be greater than the average variable cost (p > AVC), whereas in the long run, the cost price must be greater than the average cost (p > AC). The marginal cost must be non-decreasing at q0. What are the 3 conditions of profit maximization?
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