1. What is Profit Maximization?

Profit maximization is the process of determining the price and output level that returns the greatest profit for a business. The basic profit equation is Profit = (Price × Quantity) - Total Cost.

2. How Does the Calculator Work?

The calculator uses the profit equation:

Where:

• \( P \) — Price per unit
• \( Q \) — Quantity sold
• \( C(Q) \) — Total cost as a function of quantity

Explanation: The equation calculates the difference between total revenue (price × quantity) and total costs.

3. Importance of Profit Calculation

Details: Accurate profit calculation is crucial for business decision-making, pricing strategies, and financial planning.

4. Using the Calculator

Tips: Enter the price per unit, quantity sold, and total costs. All values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between profit and revenue?
A: Revenue is total income from sales (P × Q), while profit is revenue minus all costs.

Q2: How can I maximize profit?
A: Profit can be maximized by finding the optimal balance between price, quantity sold, and costs.

Q3: What are fixed vs variable costs?
A: Fixed costs don't change with production volume, while variable costs do. Both are included in total cost.

Q4: What is marginal profit?
A: The profit earned by producing and selling one additional unit of a product.

Q5: How does price elasticity affect profit?
A: Price elasticity measures how quantity demanded responds to price changes, which directly impacts revenue and profit.