when is the level of profit maximizing output reached
In economics, profit maximization is the short run or long run process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this problem. The total revenue -- total cost perspective relies on the fact that profit equals revenue minus cost and focuses on maximizing this difference, and the marginal revenue -- marginal cost perspective is based on the fact that total profit reaches its maximum point where marginal revenue equals marginal cost.