Profit Maximinization
P
Q
Demand
Marginal Cost
Input: Price =
MC =
20
Quantity =
TR = P*Q =
Profit = (P-MC)*Q =
100
100
10000
8000
Profit
Adjust price by moving the slider.
- Note that the profit is equal to the
to the area of the yellow square.
- The maximum profit occurs when
the area of the square is the largest.
Profit
Q
Area of the yellow square.
Note that the slope is zero
when the profit is maximized.
The slope is the derititive
of the profit function.