Describe the Circumstance Under Which Profit Maximization Is the Same

question 98

Essay

Describe the circumstance under which profit maximization is the same as revenue maximization. Use a hypothetical numerical example to help explain why this is so.

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Definitions:

Perfectly Inelastic

A situation in economics where the quantity demanded or supplied does not change regardless of changes in price.

Elasticity

A measure in economics that denotes the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Product Uses

The various applications or purposes for which a product is intended or can be utilized by consumers.

Unit Elasticity

A situation in economics where a change in the price of a good or service results in a proportionally equal change in the quantity demanded or supplied.