Answer to Question #200326 in Microeconomics for Vartan Aintablian

Question

Question involving finding profit maximizing profit I must send photos please get back to me ASAP

Answer 1

Factors that affect the increase in profits

First of all, you need to understand what the profit depends on. It:

the quality of products or services provided - there is a direct relationship, that is, the higher the quality, the more you can earn;

flexible pricing policy - it is desirable to cover consumers with different income levels. Sometimes it’s best to make money on small things;

a successful advertising campaign - they should know about you, as well as remember, you should be visible and heard. Brand awareness is useful for more than just sales. If the company is well promoted, it is easier to sell it, it is easier to find investors or take out a loan;

high-quality scaling of a business - a striking example, in this case, can be just the creation of a franchise.

Ways to increase profits

There are several ways to increase your profits. Let's take a look at the most basic ones. And keep in mind that you do not have to dwell on only one specific one. Nobody bothers to combine options.

Increase in sales:

the efficiency of pricing - the price list must meet the realities of the market. Paradoxically, sometimes prices need to be raised to activate sales;

quality of products or services - constant and strict control is important;

expansion or reduction of the assortment - if they do not take the goods from you, perhaps you are simply offering something wrong;

increase in sales/implementation efficiency - this can be achieved in different ways, for example, experimenting with promotions, hiring more staff or increasing their interest;

compliance with the terms of cooperation with the client - some companies go first of all for excellent accompanying service.

Reduced costs:

constant study of expenses - you must understand what your money is spent on;

careful cost management - optimization is very important, but do not forget about a reasonable balance between economy and the quality of internal business processes;

improvement of budget management - to achieve this goal, competently organized management accounting allows;

elimination of unclaimed products/services - disposal can also be carried out profitably for yourself.