Definition
- Sales maximisation
- Sales maximisation is producing the largest output a firm can sell without making a loss, where average revenue equals average cost.
- Not to be confused with: Revenue maximisation
- Revenue maximisation is producing the output at which total revenue is as large as possible, where marginal revenue is zero.
Test yourself
What is the difference between sales maximisation and revenue maximisation?
A revenue maximiser stops where one more sale adds no revenue; a sales maximiser keeps going until price has fallen to average cost.
Learn it properly: the module
Also in: Business objectives