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Total cost total revenue method- The method is widely known and used by many companies;the perspective of this method is based on the fact that profit equals to revenue minus cost and focuses on maximizing this difference.
2. Marginal cost marginal revenue method- The method though rarely used has a perspective that is based on; profit reaches a maximum point where marginal revenue is equal to marginal cost. On a different perspective marginal profit is equal to marginal revenue minus marginal cost; therefore, if marginal revenue is greater than marginal cost at some point of output then marginal profit is positive and thus a greater amount of the produce should be produced.
At point where marginal revenue is equal to the marginal cost the marginal profit is zero and it is at this point that the profit is maximized.
Mabongajoel answered the question on August 20, 2018 at 11:09
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