Profit Maximization

In economics, profit maximization is the short run or long run process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this problem. The total revenue–total cost perspective relies on the fact that profit equals revenue minus cost and focuses on maximizing this difference, and the marginal revenue–marginal cost perspective is based on the fact that total profit reaches its maximum point where marginal revenue equals marginal cost.

Read more about Profit Maximization:  Basic Definitions, Total Revenue - Total Cost Perspective, Marginal Revenue-marginal Cost Perspective, Case in Which Maximizing Revenue Is Equivalent, Changes in Total Costs and Profit Maximization, Markup Pricing, Marginal Product of Labor, Marginal Revenue Product of Labor, and Profit Maximization

Other articles related to "profit maximization, profit, maximization":

Marginal Product of Labor, Marginal Revenue Product of Labor, and Profit Maximization
... The general rule is that firm maximizes profit by producing that quantity of output where marginal revenue equals marginal costs ... The profit maximization issue can also be approached from the input side ... That is, what is the profit maximizing usage of the variable input? To maximize profit the firm should increase usage of the input "up to the point where the ...
Economic Model - Types of Models
... – Other examples of quantitative models are based on principles such as profit or utility maximization ... given by the comparative statics of taxation on the profit-maximizing firm ... The profit of a firm is given by where is the price that a product commands in the market if it is supplied at the rate, is the revenue obtained from ...

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