# Profit Maximization Model and Theory for Market | Prop…

Profit maximization is one of the topics that are likely to be tested in the short-answer section of the AP Calculus exam. Profit is equal to a business’s revenue minus the costs incurred in producing that revenue. Profit maximization is an important concern because businesses are run in order to earn the highest profits possible. Calculus can be used to calculate the profit-maximizing number of units produced.

## Profit Maximisation Hypothesis of Traditional Economic …

### Profit maximization - Wikipedia

Set profit to equal revenue minus cost. For example, the revenue equation 2000x – 10x2 and the cost equation 2000 + 500x can be combined as profit = 2000x – 10x2 – (2000 + 500x) or profit = -10x2 + 1500x – 2000.

### Profit Maximisation Hypothesis Free Essays - StudyMode

Calculate the maximum profit using the number of units produced calculated in the previous step. In this example, inserting x = 75 into the profit equation -10x2 + 1500x – 2000 produces -10(75)2 + 1500(75) – 2000 or 54,250 in profit.
That’s how to find the maximum profit in calculus!

### Profit Maximization Model in Managerial Economics

For example, firms sometimes engage in a strategy known as penetration pricing, whereby they start off by charging a low price in an attempt to develop or expand the market.

### Profit maximization hypothesis by Phyllis Lloyd - issuu

For example, a manager might estimate her firm’s elasticity of demand and marginal cost and determine that she could make more money by decreasing price.