For students who like calculus: You can show the condition for profit maximization easily using calculus. Define T P(q)= total profits, T C(q)= total costs, and T R(q)= total revenues. Marginal this-or-that is the derivative of this-or-that with respect to output, so d T R / d q=T R^'(q)=M R= marginal revenue. a. Explain why T P=T R-T C b. Show that a maximum of the profit function comes where T C^'(q)=T R^'(q) . Interpret this finding. | Numerade

How to Find Maximum Profit (Profit Maximization)

Profit Maximization Definition, Formula & Theory