Mathematical Model For Profit Maximization In Competitive Market:- Ukandu Emmanuel C

ABSTRACT viii This study shows how to use mathematical model to determine the output level that maximizes profit for a firm in a perfectly competitive market and examines how market price and production costs affect profit decisions. Profit is the difference between total revenue and total cost, and firms maximize profit where marginal revenue equals marginal cost (MR = MC). Since firms in perfect competition are price takers, marginal revenue equals market price, making the profit-maximizing condition P = MC.The study explains key concepts such as minimum and maximum, which represent the lowest and highest values of a function, and highlights that profit maximization occurs at the highest profit point. It also emphasizes marginal analysis, where marginal revenue is the extra income from selling one more unit, while marginal cost is the additional cost ofproducing one more unit. Firms continue production as long as marginal revenue exceeds marginal cost and stop when both are equal.