The Real World of Profit Maximization

Assume you make cars. You produce a car and take it to the marketplace. As long as you can sell the car for more than it costs you to make it, you will sell it. In the technical language of profit maximization, one would say that you would bring the car to market as long as the marginal revenue from the sale of the 'car is greater than the marginal cost of producing the car.

In fact, you will continue to bring additional cars to the market until the revenue from the sale of the car is equal to the cost of producing the car (marginal revenue equals marginal cost). Once your cost exceeds your revenue (marginal revenue is less than marginal cost), you will no longer bring cars to the marketplace because you will lose money on these additional units.