Maximising average profit is equivalent to maximising total profit.

Question

Quizplus · Accepted Answer

Maximising average profit means trying to increase the profit per unit of product sold. However, maximising total profit means trying to sell as many units as possible regardless of the profit per unit. Therefore, maximising average profit may not necessarily lead to maximising total profit. For example, if a company decides to increase the price of a product to maximise average profit, it may end up selling fewer units, resulting in lower total profit.

Maximising Average Profit Is Equivalent to Maximising Total Profit