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What are the differences between maximization and optimization?
Wiki User
∙ 15y ago
Profit maximization refers to the process of determining the price and the total output level that can ensure a firm the maximum profit. There are many strategies and ways by which this issue can be approached. According to some people, profit equals the difference between the total revenue and the total cost. This is better known as total revenue-total cost method. Another method called the marginal revenue-marginal cost stresses on the fact that profit in a competitive and non-monopolized market reaches the maximum point where the marginal revenue is equal to the marginal cost. The cost incurred by a firm are of two types namely fixed cost and variable cost. Fixed cost refers to those cost that have to be incurred by the firms even during the times of no output. The examples of fixed costs are wages, rent, upkeep charges, maintenance charges etc. Variable cost refers to those cost which increase as more and more output is produced. The summation of these two costs gives the total cost. Marginal cost is the change in cost as more and more output is produced -- in economical terms, it is the derivative of cost with respect to the output quantity. The marginal cost may vary accordingly if the calculus approach is taken.
Profit optimization refers to the processes that look to cut down unnecessary costs in the production. It is much different from profit maximization. Here, if a firm is already running in profit, it can look to optimize the profit even more so as to consolidate its own market in the globalized world. The profit is optimized by means like cutting down on the wages, cost of finished product from small manufacturers. Cost-cutting can be, in a way related to profit optimization.
Wiki User
∙ 14y ago
Wiki User
∙ 15y agodifference between maximization and optimization
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The differences between goal of a firm and profit maximization?
A goal of firm isn't always profit driven, it can be any cause. Profit maximization is revenue driven, making more money is it focus.
What is the difference between profit maximization and value maximization?
discount rate
Differentiate between value for money and profit maximization concept in corporate governance?
differentiate between value for money and profit maximization
Difference between global optimization and partial optimization?
essential diffrence between global and local optimization
What is the difference between stock price maximization and price maximization?
Profit maximization does not reflect (1) the timing of profits and (2) the riskiness of different operating plans. However, both of these factors are reflected in stock price maximization.
Wealth maximization is a function of share price maximization discuss?
the difference between Profit maximisation and share price maximisation
What is the Difference between profit maximization and sale maximization?
The key difference between profit maximization and sales maximization focuses on the handling of costs/expenses. Sales maximization is a topline income statement action that attempts to maximize sales revenues. Sales maximization techniques are used in scale industries where the expense base is largely fixed and there are limited variable costs associated with acquiring the next dollar of sales. Profit maximization is a multiline income statement action that attempts to both maximize sales (as represented above) while minimizing expenses in order to maximize effective margin. Profit maximization techniques are used across a variety of industries.
What are the similarities between profit maximisation objectives and wealth maximisation objectives?
Both profit maximization and wealth maximization have the objective of increasing the net worth.
What is Three basic reasons is profit maximization inconsistent with wealth maximization?
Profit maximization is a narrow view which accounts for only the difference between sales and costs Wealth Maximization is broader and more philosophical in approach. Wealth maximisation includes not exhaustively culture , synergy, value, potential and wealth
Under what conditions might profit maximization not lead to stock price maximization?
Under what conditions might profit maximization not lead to stock price maximization?"
Are wealth maximization and profit maximization related?
Not necessarily
What are the difference between value maximation and profit maximation?
Value maximization and profit maximization are very much related, the main difference being- value maximization means increases in owners' wealth achieved by maximizing of the value of a firm's common stock. profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. the other difference among the two could be sited as- value maximization is seen as long term objective of a firm, whereas profit maximization is generally a short term objective.
