Transcription of ECON 600 Lecture 3: Profit Maximization
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ECON 600 Lecture 3: Profit Maximization
ECON 600 Lecture 3: Profit Maximization I. The Concept of Profit Maximization Profit is defined as total revenue minus total cost. = TR TC (We use to stand for Profit because we use P for something else: price.) Total revenue simply means the total amount of money that the firm receives from sales of its product or other sources. Total cost means the cost of all factors of production. But and this is crucial we have to think in terms of opportunity cost, not just explicit monetary payments.
ECON 600 Lecture 3: Profit Maximization I. The Concept of Profit Maximization Profit is defined as total revenue minus total cost. Π = TR – TC
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