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Lesson PreviewLesson 5 of 7 in this unit

3.5 Profit Maximization

Part of Production, Cost, and the Perfect Competition Model in AP® Microeconomics. Read the opening section, then create a free account for the full interactive lesson, practice, and progress tracking.

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Key Concepts of Profit Maximization

Profit Maximization: A firm’s goal to achieve the highest possible difference between total revenue (TR) and total cost (TC). Formula: Profit=TotalRevenue−TotalCost{Profit=Total Revenue − Total Cost}

In this unit

7 lessons

  1. 3.1The Production FunctionPreview lesson
  2. 3.2Short-Run Production CostsPreview lesson
  3. 3.3Long-Run Production CostsPreview lesson
  4. 3.4Types of ProfitPreview lesson
  5. 3.5Profit MaximizationThis lesson
  6. 3.6Firms’ Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit a MarketPreview lesson
  7. 3.7Perfect CompetitionPreview lesson

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