Profit maximisation
What Profit maximisation means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Profit maximisation
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
Check what you remember
Read the wording for your board, then hide it and explain Profit maximisation in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: Pearson Edexcel
Occurs when the difference between total revenue and total cost is greatest, often the primary goal to satisfy shareholders and fund reinvestment.
A business objective that firms pursue by adjusting output volumes when they must accept the prevailing market price.
The traditional objective of a producer, which influences decisions to minimise costs and optimise output.
The goal that drives firms to respond effectively to changes in demand so that they can maximise profits.
The objective typically sought by shareholders, which can conflict with employees demanding higher wages.
A primary financial objective of shareholders, alongside high dividends and capital growth.
Topics that use Profit maximisation
- Business objectives (Pearson Edexcel A-Level)
- Ethical issues (Pearson Edexcel A-Level)
- Price mechanism (Pearson Edexcel A-Level)
- Stakeholders (economic agents) and their objectives (Pearson Edexcel A-Level)
- Supply (Pearson Edexcel A-Level)
- The competition (Pearson Edexcel A-Level)
Related terms
- Competitive advantage
- Price elasticity of demand
- Sales maximisation
- Stakeholders
- Survival
- Trade-offs
- Advertising Standards Authority (ASA)
- Branding
Using Profit maximisation in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
Practise Economics B questions
Create a free account to answer exam-style questions on this topic and get feedback on your answers.
A week of Premium from your first lesson · Then the free plan continues · No card, no charge