Question

If a company has an increasing revenue or profit function, what does the limit as x approaches infinity tell us?

Answer 1

Company has to increase revenue or profit function :-

Actually profit function =total income -total cost

profit =income-cost

profit changes with respect to change in cost of production and income

Profit and cost has inverse relationship that is cost increases then profit decreases vise versa so it increases profit function then cost of production need to decrease there are different approaches to decrease cost of production

1.We can increase unit of production to the appropriate level or the level where the fixed  cost is maximum low

2. We can decrease fixes cost by reducing the cost like rent, salaryand by purchasing assets which are in regular use but we paying money to use regular

3. Variables cost also we can decrease by selecting low cost material supplier or anything the that requires to our business 4. To increase sales to maximimum level where cost of production less and profit is more

5. To increase selling price of the products or services that we are providing to customers The price will increase to only some extent then only it will work. Price we can only when there is demand for product are services we are providing to the customer

6 Make exist customers to consume more by providing different type of offers