Profit vs Efficiency Maximization

Glossary:

• profit maximization
  In the short run with fixed costs, a firm maximizes economic profit by equating marginal revenue (MR) with marginal variable cost (MC) when MC is increasing. Marginal revenue is lower than price (i.e., MR < P) if the firm must lower the price for all units just to sell one more unit.

Topics:

Market Structure, Profit maximization

Keywords

consumer surplus, economic surplus, efficiency maximization, perfect price discrimination, price taking, profit maximization, single pricing