If {profit = revenue - expense} and {revenue = price x (quantity sold)}, then to maximize profits we need to find
a price where any further increase in price would lead to a large falloff in demand.

Question

Quizplus · Accepted Answer

To maximize profit, we need to find the optimal price point where the revenue is high enough to cover expenses and still generate profit. However, if we increase the price beyond a certain point, the quantity sold may decrease, leading to a decrease in revenue and ultimately profit. Therefore, we need to find the price point where any further increase in price would lead to a significant decrease in demand, and select that as the optimal price point.

If {Profit = Revenue - Expense} and {Revenue = Price