Profit maximization is a process by which a firm determines the price, input, and output levels that will lead to the highest possible total profit in the short or long run. In other words, it is the process of finding the level of production that generates the maximum amount of profit for a business. The profit-maximizing output is the one at which the difference between total revenue and total cost is the greatest. To achieve profit maximization, a firm must produce at a level where marginal revenue is equal to marginal cost. If the marginal revenue is greater than the marginal cost, then the firm can produce additional units to earn additional profit. However, if the marginal revenue is less than the marginal cost, then the firms total profit is not maximized.

There are several ways to approach profit maximization, including graphically plotting revenue and cost as functions of output, using calculus to maximize profit with respect to output level, or using a table of costs and revenues at each quantity. Profit maximization is a key parameter in measuring the performance and efficiency of a firm economically. However, it is important to note that the process of profit maximization is a series of steps that can take a considerable amount of time, and it does not consider the present value of money or the quality of products and services.