Revenue maximisation
Revenue maximisation occurs where marginal revenue equals zero (MR = 0), corresponding to the highest point on the total revenue curve. The firm produces higher output and charges lower prices than under profit maximisation, prioritising sales volume over profitability.
Real World
Amazon historically prioritised maximising revenue over profit, reinvesting all sales income into growth, which kept prices low for consumers while the company expanded into new markets like cloud computing.
Exam Focus
Identify MR = 0 on a diagram and contrast the output level clearly with the profit-maximising point.
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