ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Profit maximisation is a process business firms undergo to ensure the best output and price levels are achieved in order to maximise its returns. Influential factors such as sale price, production cost and output levels are adjusted by the firm as a way of realising its profit goals.

Detailed explanation-2: -The primary purpose of a business is to maximize profits for its owners or stakeholders while maintaining corporate social responsibility.

Detailed explanation-3: -Businesses maximize their profits to make money, which is not only a benefit, but something all companies need to survive. This is the “default” state of any organization, so to speak, and it should be your primary, long-term goal if you want to see your business flourish.

Detailed explanation-4: -The main objective of any business is to earn a profit. Just as a plant cannot survive without water, similarly a business cannot sustain without profit. Profit is necessary for growing and expanding business activities.

Detailed explanation-5: -In neoclassical economics, which is currently the mainstream approach to microeconomics, the firm is assumed to be a “rational agent” (whether operating in a perfectly competitive market or otherwise) which wants to maximize its total profit, which is the difference between its total revenue and its total cost.