On the supply side, firms maximize profits and entry occurs until the marginal firm can only just break even.

Individuals maximize utility and firms maximize profits.

The general rule is that firm maximizes profit by producing that quantity of output where marginal revenue equals marginal costs.

A firm maximizes profit by operating where marginal revenue equal marginal costs.

Where firms maximise profits in uncompetitive conditions the effect is that consumers are denied goods which they would have been willing to buy at the competitive market price.

If a firm was not maximising its future cash flows, and hence its value, an opportunity opened up for a bid.

In an attempt to achieve an optimal situation, firms can maximize profits with this Maximized profit function:

The small firms maximize profits by acting as PC firms-equating price to marginal costs.

Cyert and March proposed that real firms aim at satisficing rather than maximizing their results.

Households are assumed to maximize utility subject to budget constraints while firms maximize profits.