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  2. Profit maximization - Wikipedia

    en.wikipedia.org/wiki/Profit_maximization

    Here too the profit is not maximized and the firm has to lower its output level to maximize profits. In economics, profit maximization is the short run or long run process by which a firm may determine the price, input and output levels that will lead to the highest possible total profit (or just profit in short).

  3. Monopoly price - Wikipedia

    en.wikipedia.org/wiki/Monopoly_price

    [1] [2] [3] The monopoly always considers the demand for its product as it considers what price is appropriate, such that it chooses a production supply and price combination that ensures a maximum economic profit, [1] [2] which is determined by ensuring that the marginal cost (determined by the firm's technical limitations that form its cost ...

  4. Markup rule - Wikipedia

    en.wikipedia.org/wiki/Markup_rule

    Mathematically, the markup rule can be derived for a firm with price-setting power by maximizing the following expression for profit: = () where Q = quantity sold, P(Q) = inverse demand function, and thereby the price at which Q can be sold given the existing demand C(Q) = total cost of producing Q.

  5. Monopolistic competition - Wikipedia

    en.wikipedia.org/wiki/Monopolistic_competition

    The company is able to collect a price based on the average revenue (AR) curve. The difference between the company's average revenue and average cost, multiplied by the quantity sold (Qs), gives the total profit. A short-run monopolistic competition equilibrium graph has the same properties of a monopoly equilibrium graph.

  6. Perfect competition - Wikipedia

    en.wikipedia.org/wiki/Perfect_competition

    In a single-goods case, a positive economic profit happens when the firm's average cost is less than the price of the product or service at the profit-maximizing output. The economic profit is equal to the quantity of output multiplied by the difference between the average cost and the price.

  7. Cournot competition - Wikipedia

    en.wikipedia.org/wiki/Cournot_competition

    These functions describe each firm's optimal (profit-maximizing) quantity of output given the price firms face in the market, , the marginal cost, , and output quantity of rival firms. The functions can be thought of as describing a firm's "Best Response" to the other firm's level of output.

  8. Hotelling's lemma - Wikipedia

    en.wikipedia.org/wiki/Hotelling's_lemma

    Hotelling's lemma is a result in microeconomics that relates the supply of a good to the maximum profit of the producer. It was first shown by Harold Hotelling, and is widely used in the theory of the firm.

  9. Long run and short run - Wikipedia

    en.wikipedia.org/wiki/Long_run_and_short_run

    The profit rate earned in that sector is the same as the profit rate earned across the whole economy, and it is stated that the conditions of equilibrium will prevail. Therefore, according to this specific approach, supply and demand changes only explain are indicative of the deviation that occur of "market" from "natural" prices.