10. Word Bank price equal increases below decreases revenue above marginal average total Demand for the product that the rm produces generates the rm's revenue. A rm can calculate revenue by multiplying price times quantity sold. The amount by which total revenue changes when output changes by one unit is revenue. Economists can nd the prot-maximizing output level for a rm by comparing marginal and marginal co st. If marginal revenue is greater than marginal cost, boosting output by one unit total prot. If marginal cost is greater than marginal revenue, raising output by one unit total prot. At the prot-maximizing output, if price or revenue is greater than average total cost, the rm will earn a prot. At the prot-maximizing output, if the demand or average revenue curve lies below the average total cost, but the average variable cost curve, the rm is operating at a loss. When the average total revenue is just to the average variable cost, it is time for the rm to consider minimizing losses by shutting down. At the prot-maximizing output, it the demand or average revenue curve lies the average variable cost curve the rm must shutdown to minimize losses. A perfectly competitive rm is a(n) taker and sells output at prices determined by forces beyond its control