Setting Output MR=MC MR=P therefore Set p=mc to maximize profits Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 Setting Output: • MR = MC • MR = P, therefore • Set P = MC to maximize profits