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He claimed based on this, the organisations will do all in their power to gain maximum benefit for themselves.
In economics, profit maximisation is the process by which a firm determines the price and output level that returns the greatest profit. The neoclassical model of profit maximisation tells us that the objective of the organisation is to optimise profits where MC=MR.
Figure 1. Profit maximisation model.
Profits are shown as a profit locus, ? locus showing the zero profit level, the maximum profit level and all intermediate points. The quantity associated with the maximum profit level is Q?max – the production quantity associated with the greatest distance between the revenue and cost curves...
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