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"Optimal" can be defined in various ways. When looking from a profit maximization viewpoint, the level of production with the highest (return/cost) ratio will be the optimal. However, when looking purely from a productive viewpoint, the optimal level would be the one with the highest (output quantity/input quantity) ratio

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What is profit maximization of corporation?

Profit Maximization is a process that companies undergo to determine the best output and price levels in order to maximize its return. Companies usually adjust production costs, sale prices, and output levels as a way of reaching its profit goal. Profit maximization is a good thing for a company, but can be a bad thing for consumers if the company starts to use cheaper products or decides to raise prices.


Why are fixed costs are irrelevant in profit maximization decision?

Fixed costs are considered irrelevant in profit maximization decisions because they do not change with the level of production or sales; they remain constant regardless of output. Profit maximization focuses on marginal costs and marginal revenues, which directly impact decision-making. Since fixed costs do not influence the marginal analysis, they do not affect the optimal output level. Thus, decisions should be based on variable costs and revenues that fluctuate with production levels.


Sales maximization vs profit maximization?

sales maximization technique is generally used in scale industries where base of the expenses is largelly fixed and where variable costs are limited. on the other hand profit maximization technique are used by variety of industries. total output is higher in sales maximization as compared to profit maximization


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.


What do you mean by maximize profits?

profit maximization is the (short run) process by which a firm determines the price and output level that returns the greatest profit


An efficient point of production is?

at the point where MR=MC, Profit is maximized.This is considered as the Optimum Production.


Policies on profit maximization?

Profit maximization is a short run or long run process which a firm determines the price and output level that returns the greatest profit. The total revenue-total cost perspective is based on the fact that profit equals revenue minus cost and focuses on maximizing this difference.


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 examples of profit maximization and maximization of shareholders profit?

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Advantages of profit maximization?

Profit maximization increase the graph of outputs.


Is profit maximization is good or bad for society?

Profit maximization can be both good or bad. Done correctly, profit maximization helps the company provide great products and services for customers.