A simple theory explains the shape of the supply curve based solely on the cost function. Let us suppose the market price for a one unit of our product is P. For a company selling this good, the best strategy is to adjust the production Q so that its profit is maximized. We can maximize the profit profit = revenue − − costs = P Q − − C ( Q ) by differentiating with respect to Q and solving P − − C ′ ( Q opt ) = 0.