profit-maximization

Vocabulary Word

Definition

'Profit-maximization' basically means doing what’s necessary to earn as much money as possible from a business or investment. It's a key goal for any business.

Examples in Different Contexts

In business strategy, 'profit maximization' involves making decisions that increase a company's net earnings, such as cost reduction, price adjustments, and market expansion. A business strategist might discuss, 'Our focus on profit maximization includes optimizing our operations and exploring new revenue streams.'

Practice Scenarios

Economics

Scenario:

I've been trying to pinpoint the output level where our marginal revenue matches our marginal cost. Any insights?

Response:

To hit that profit-maximization level, detailed analysis of our cost and revenue figures is critical.

Business

Scenario:

Our shareholders want to see higher returns, we need to re-evaluate our strategies. Any suggestions?

Response:

We could consider strategic outsourcing for cost savings and profit maximization.