In the total cost revenue total cost approach to determine the profit maximizing output you will start by recognizing that profit is equal to total revenue minus total cost. The profit –maximizing output is the output at which profit reaches it maximum. In the TR TC approach the profit maximization is the quanity of output that achieves the greatest difference between TR and TC. The price of the good is set because all of the competing companies are price takers. Marginal profit is equal to marginal revenue minus marginal cost. In the marginal revenue to marginal cost approach if the marginal revenue is greater than the marginal cost then the marginal profit is positive and if the marginal revenue is less than the marginal cost then the marginal profit is negative. The profit increases when the marginal revenue is almost equal to the marginal cost. Again the profit decreases when the marginal revenue is less than the marginal cost. Again profit does not increase or decrease if the marginal revenue is equal to the marginal cost. When the production level equates the marginal revenue and the marginal cost in that case the point of profit maximization is reached. Firms compare the amount that each additional unit of output would add to the total revenue or the total cost.
Marginal cost is the change in the total cost that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a good. In general terms, marginal cost at each level of production includes any additional costs required to produce the next unit. Marginal revenue is basically the extra money you would get for selling an extra unit of something. The formula says that if you take the TR from selling two things and subtract it from the TR of selling one thing you will get the MR for selling two things.
In the given scenario marginal revenue decreased by