Alternatives and Supplements: Fun on the Internet
Back to Overview
Back to Table of Contents

How to Maximize Profits


Economist Lester Thurow writes about profit for The Concise Encyclopedia of Economics:


One of the reasons that firms might not actually maximize profit is something called the principal-agent problem, which is explained in this piece from a publication from India:

Circular Flow

An article on explains circular flow, though it does not have a picture, which might be helpful:

Dealing with Three Fundamental Tasks
The Demand Curve for Output

Amosweb explains how the demand curve is the source of the marginal-revenue curve:

The Production Function

Thomas McGahagan of the University of Pittsburgh explains the production function:

Searching for Total Cost

(I have not yet found an appropriate entry for this topic.)

Profit-Maximizing Output

Arnold Kling explains profit maximization in his class notes:


Profit in Real Firms

Here is an entry from what may be the best economics blog there is. It raises more questions than it answers.

Application of the Theory

Sweatshops are terrible, but should they be abolished? Economists say that you need to consider the alternatives before you answer that question. Opportunity costs should not be ignored.


Textbooks traditionally show how firms maximize profits using a variety of cost and revenue curves. has a good example of this approach in the form of a problem you can work:


These links were checked on July 5, 2008.

Back to Overview
Why is this page here?

Copyright Robert Schenk