Profit-Maximizing Quantity

Definition

The profit-maximizing quantity is the level of output at which a firm earns the highest possible profit. It is determined by comparing marginal revenue and marginal cost.

Related terms

Marginal Revenue: Marginal revenue refers to the additional revenue a firm earns from selling one more unit of output.

Marginal Cost: Marginal cost represents the additional cost incurred by producing one more unit of output.

Total Revenue: Total revenue is the overall income generated from selling a certain quantity of goods or services.