Search

Text Color

Margin Size

Font Type

Enable Dyslexic Font

12: Output Profit Maximization

Last updated

Jul 7, 2021
Save as PDF
- 11.4: Cost Curves
- 12.1: Initial Solution

$\newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} }$

$\newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}}$

$\newcommand{\id}{\mathrm{id}}$ $\newcommand{\Span}{\mathrm{span}}$

( \newcommand{\kernel}{\mathrm{null}\,}\) $\newcommand{\range}{\mathrm{range}\,}$

$\newcommand{\RealPart}{\mathrm{Re}}$ $\newcommand{\ImaginaryPart}{\mathrm{Im}}$

$\newcommand{\Argument}{\mathrm{Arg}}$ $\newcommand{\norm}[1]{\| #1 \|}$

$\newcommand{\inner}[2]{\langle #1, #2 \rangle}$

$\newcommand{\Span}{\mathrm{span}}$

$\newcommand{\id}{\mathrm{id}}$

$\newcommand{\Span}{\mathrm{span}}$

$\newcommand{\kernel}{\mathrm{null}\,}$

$\newcommand{\range}{\mathrm{range}\,}$

$\newcommand{\RealPart}{\mathrm{Re}}$

$\newcommand{\ImaginaryPart}{\mathrm{Im}}$

$\newcommand{\Argument}{\mathrm{Arg}}$

$\newcommand{\norm}[1]{\| #1 \|}$

$\newcommand{\inner}[2]{\langle #1, #2 \rangle}$

$\newcommand{\Span}{\mathrm{span}}$ $\newcommand{\AA}{\unicode[.8,0]{x212B}}$

$\newcommand{\vectorA}[1]{\vec{#1}} % arrow$

$\newcommand{\vectorAt}[1]{\vec{\text{#1}}} % arrow$

$\newcommand{\vectorB}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} }$

$\newcommand{\vectorC}[1]{\textbf{#1}}$

$\newcommand{\vectorD}[1]{\overrightarrow{#1}}$

$\newcommand{\vectorDt}[1]{\overrightarrow{\text{#1}}}$

$\newcommand{\vectE}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash{\mathbf {#1}}}}$

$\newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} }$

$\newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}}$

$\newcommand{\avec}{\mathbf a}$

$\newcommand{\bvec}{\mathbf b}$

$\newcommand{\cvec}{\mathbf c}$

$\newcommand{\dvec}{\mathbf d}$

$\newcommand{\dtil}{\widetilde{\mathbf d}}$

$\newcommand{\evec}{\mathbf e}$

$\newcommand{\fvec}{\mathbf f}$

$\newcommand{\nvec}{\mathbf n}$

$\newcommand{\pvec}{\mathbf p}$

$\newcommand{\qvec}{\mathbf q}$

$\newcommand{\svec}{\mathbf s}$

$\newcommand{\tvec}{\mathbf t}$

$\newcommand{\uvec}{\mathbf u}$

$\newcommand{\vvec}{\mathbf v}$

$\newcommand{\wvec}{\mathbf w}$

$\newcommand{\xvec}{\mathbf x}$

$\newcommand{\yvec}{\mathbf y}$

$\newcommand{\zvec}{\mathbf z}$

$\newcommand{\rvec}{\mathbf r}$

$\newcommand{\mvec}{\mathbf m}$

$\newcommand{\zerovec}{\mathbf 0}$

$\newcommand{\onevec}{\mathbf 1}$

$\newcommand{\real}{\mathbb R}$

$\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}$

$\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}$

$\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}$

$\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}$

$\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}$

$\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}$

$\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}$

$\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}$

$\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}$

$\newcommand{\laspan}[1]{\text{Span}\{#1\}}$

$\newcommand{\bcal}{\cal B}$

$\newcommand{\ccal}{\cal C}$

$\newcommand{\scal}{\cal S}$

$\newcommand{\wcal}{\cal W}$

$\newcommand{\ecal}{\cal E}$

$\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}$

$\newcommand{\gray}[1]{\color{gray}{#1}}$

$\newcommand{\lgray}[1]{\color{lightgray}{#1}}$

$\newcommand{\rank}{\operatorname{rank}}$

$\newcommand{\row}{\text{Row}}$

$\newcommand{\col}{\text{Col}}$

$\renewcommand{\row}{\text{Row}}$

$\newcommand{\nul}{\text{Nul}}$

$\newcommand{\var}{\text{Var}}$

$\newcommand{\corr}{\text{corr}}$

$\newcommand{\len}[1]{\left|#1\right|}$

$\newcommand{\bbar}{\overline{\bvec}}$

$\newcommand{\bhat}{\widehat{\bvec}}$

$\newcommand{\bperp}{\bvec^\perp}$

$\newcommand{\xhat}{\widehat{\xvec}}$

$\newcommand{\vhat}{\widehat{\vvec}}$

$\newcommand{\uhat}{\widehat{\uvec}}$

$\newcommand{\what}{\widehat{\wvec}}$

$\newcommand{\Sighat}{\widehat{\Sigma}}$

$\newcommand{\lt}{<}$

$\newcommand{\gt}{>}$

$\newcommand{\amp}{&}$

$\definecolor{fillinmathshade}{gray}{0.9}$

12.1: Initial Solution
With a total cost function, TC(q), and its associated average and marginal cost curves, we are ready to solve the the firm’s output profit maximization problem. The firm chooses the amount of output that maximizes profit, defined as total revenue minus total cost. This is the second of three optimization problems that make up the Theory of the Firm.
12.2: Deriving the Supply Curve
The most important comparative statics analysis of the firm’s output profit maximization problem is based on tracking q* (quantity supplied) as price changes, ceteris paribus. This gives us the firm’s supply curve.
12.3: Diffusion and Technical Change

Support Center

How can we help?