Intramarginal Rent

When three companies produce the same type of products and are price takers in the same market, they may still earn different profits if their cost pattern and production level differ. This Demonstration assumes profit-maximizing behavior for the three companies and calculates optimal quantities and corresponding profits for each company. The difference between the least cost-efficient and the others is referred to as intramarginal rent, an economic rent, exceeding the normal profit defined by the less cost-efficient.
The three companies are price takers; hence, they are all facing the same global price, shown as a blue line. Their costs may, however, differ; the initial marginal costs of each company are controlled by the three sliders with red labels. The marginal cost of each firm is drawn as a red curve, while the corresponding average price is the magenta curve.


  • [Snapshot]
  • [Snapshot]
  • [Snapshot]
    • Share:

Embed Interactive Demonstration New!

Just copy and paste this snippet of JavaScript code into your website or blog to put the live Demonstration on your site. More details »

Files require Wolfram CDF Player or Mathematica.

Mathematica »
The #1 tool for creating Demonstrations
and anything technical.
Wolfram|Alpha »
Explore anything with the first
computational knowledge engine.
MathWorld »
The web's most extensive
mathematics resource.
Course Assistant Apps »
An app for every course—
right in the palm of your hand.
Wolfram Blog »
Read our views on math,
science, and technology.
Computable Document Format »
The format that makes Demonstrations
(and any information) easy to share and
interact with.
STEM Initiative »
Programs & resources for
educators, schools & students.
Computerbasedmath.org »
Join the initiative for modernizing
math education.
Step-by-Step Solutions »
Walk through homework problems one step at a time, with hints to help along the way.
Wolfram Problem Generator »
Unlimited random practice problems and answers with built-in step-by-step solutions. Practice online or make a printable study sheet.
Wolfram Language »
Knowledge-based programming for everyone.
Powered by Wolfram Mathematica © 2018 Wolfram Demonstrations Project & Contributors  |  Terms of Use  |  Privacy Policy  |  RSS Give us your feedback
Note: To run this Demonstration you need Mathematica 7+ or the free Mathematica Player 7EX
Download or upgrade to Mathematica Player 7EX
I already have Mathematica Player or Mathematica 7+