Profit 300
250
Maximum Profit 200 Unit Cost Holding Cost
150
Total Unit Cost Price
100
50
0 1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
We can also add to this graph a horizontal line that show the price at which we sell the goods. It is not difficult to see that the profit can be derived by measuring the difference between the Price line and the Total Unit Cost line. It also shows that the point of maximum profit falls at the point where the two cost lines cross. We can see that profit starts low, the rises rapidly to the point where the two cost lines cross and then gradually declines.