Teaching MC=MR with M&M’s

Having just completed Perfect and Imperfect Competition with my Year 13 NCEA class I used a couple of packets of M&M’s to drum home the concept of marginal analysis MC=MR. It has always been something that students have struggled with but I am hoping this experience of creating graphs with M&M’s might help their understanding and when to use the concept.

Profit is maximised at the rate of output where the positive difference between total revenues and total costs is the greatest. Using marginal analysis, the firm will produce at a rate of output where marginal revenue equals marginal cost. Below are a few of the graphs done using M&M’s.

Perfect Competition – Supernormal Profit
Monopolistic Competition – Normal Profit

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