Econ: Economics and Profit Maximization Essay

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In economics, profit maximization is the short run or long run process by which a firm determines the price and output level that returns the greatest profit. Company can make donation to a school and students can be potential customers for that company. It helps company to get better reputation. Nowadays lot of companies are in social projects, that they help schools and build a good company image, also many potential customers.
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Profit margin is the difference between the costs and price of one extra item. Setting a profit margin too high may cause smaller profits. Thus it is impossible to maximize profit margin. A company’s primary goal is to maximize gross profit.
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Profit maximization is basically is a single-period or, a short-term goal, to be achieved within one year; it is usually interpreted to mean the maximization of profits within a given period of time. A corporation may maximize its short-term profits at the expense of its long-term profitability. In contrast, stockholder wealth maximization is a long-term goal, since stockholders are interested in future as well as present profits. Wealth maximization is generally preferred because it considers wealth for the long term, risk or uncertainty, the timing of returns, and the stockholders` return. It is more comprehensive.
I believe that profit maximization still represent the best overall economic objective for corporations. Because profit and wealth maximization is still appear to be most inclusive

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