p = MC can be said to be a zero price without profit by Nada 20230920

I would like you to imagine the price of the products that the company sells. There are many different types of companies. All kinds of companies, from monopolies to perfectly competitive companies, struggle with pricing their products. I would like to take up the following formula. Sales - expenses = profit. It seems like an obvious formula without even bringing up accounting. To see the flow of money at an atomic level, it's a good idea to look at sales, costs, and profits per product. Let's now consider a perfectly competitive market, a market where profits are zero. From the above equation, if profit is set to zero, sales - expenses = 0, and sales = expenses. When mass producing a certain product, sales = price x sales quantity, cost = production volume x average cost, and the formula can be broken down. There is a relationship between sales volume and production volume, where production volume is the upper limit of sales volume, and if sales volume = production volume, there will be no unsold items, in other words, the product will be sold out. If sales volume = production volume = 1, price x sales volume = production volume x average cost, so price = average cost. Since price = marginal cost, or p = MC, is an important equation in microeconomics, it is consistent with microeconomics if marginal cost = average cost. Of course, in the real economy, companies operate to earn profits.