Asked by: Zoulikha Schomackerasked in category: General Last Updated: 3rd January, 2020
What is profit minimization?
Also know, is cost minimization the same as profit maximization?
Profit maximization implies cost minimization; however, cost minimization doesn't necessarily mean profit maximization. Profit maximization is a combination of both revenue maximization and cost minimization because profits(denoted by pi) are equal to the difference between revenues and costs.
Subsequently, question is, what is cost minimization strategy? Cost minimisation is a financial strategy that aims to achieve the most cost-effective way of delivering goods and services to the require level of quality. In theory a reduction in costs results in higher profits and better cash flow.
Beside this, what is profit maximization with example?
In other words, the profit maximizing quantity and price can be determined by setting marginal revenue equal to zero, which occurs at the maximal level of output. Marginal revenue equals zero when the total revenue curve has reached its maximum value. An example would be a scheduled airline flight.
What is Maximising profit?
Profit maximisation is the process that companies undergo in order to determine the best output and price levels in order to achieve its goals. Profit maximisation is one of the fundamental assumptions of economic theory. It will be achieved when a firm reaches the stage of equilibrium.