profit maximization

Definition

A process that companies undergo to determine the best output and price levels in order to maximize its return. The company will usually adjust influential factors such as production costs, sale prices, and output levels as a way of reaching its profit goal. There are two main profit maximization methods used, and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method. 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.

Use profit maximization in a sentence

We had to do some profit maximization because it was important to us and our financial well being for the future.

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We checked the history of this kind of profit and have determined the best path for profit maximization so that we stand out in the industry as a success.

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The company chose profit maximization by expanding it's income rather than decreasing it's expenses feeling that growth would come from vision rather than tightening the belt.

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