A Simple but Comprehensive Guide for Profit Maximization. Welcome to another Volume of Business/Applied Economics. This time we deal with a concept a little more chall enging. So, buckle up!. Most business advice treats pricing like a marketing choice. Applied economics treats it like a measurement problem. Applied Economics is the use of economic theory and data to make real decisions about prices, output, and strategy. Pricing is often the fastest lever for profit because it changes revenue on every unit you sell, today. A 3 percent price change can move profit more than a 3 percent cost cut, especially when fixed costs are large. Sometimes the best move to increase total revenue is not to increase price, but maybe decrease it (Law of Demand, Scarcity) This blog specially walks through the core logic firms use, the Demand Curve , marginal revenue and marginal cost, and the rule that profit peaks at MR=MC . You’ll also get a simple tour of the standard diagrams (demand, MR/MC, ...