Answer:
Minimize costs and maximize revenue
Explanation:
Every company must assume a basic decision for its operation that, to make it simple, answers the question how much to produce? Which cannot be answered with the simple force of desire or need, the answer to that question is related to the cost of production (direct or indirect) and to the price at which what is produced can be sold, that will determine the income of the company.
In this way, when making decisions regarding production, taking into account the current market price and its production costs, you can obtain the maximum possible benefit.
In other words, you can decide how much to produce based on the maximization of the benefit that you want to achieve that theoretically can be expressed as follows:
Profit (B) = Total revenue (IT) - total costs (CT)
For the company, the benefits represent its profits and are maximum when a maximum difference between total income and total costs is achieved.
For this, it is important to handle concepts such as marginal income that refers to the change that occurs in total income, given the unit change in the amount produced. So companies to maximize their profit must ensure that marginal revenue is equal to marginal cost.
Ima = Cma
In short, the company maximizes its usefulness at the point where it is not possible to obtain an additional benefit by increasing production, so that the last unit produced adds the same value to the total income as to the total cost. The company increases the profit when the last unit produced always generates an additional income greater than the additional cost when producing it, which is indicative that the production must increase.
