PROFIT CURVE: A curve that graphically represents the relation between economic profit earned by a firm and the quantity of output sold. This curve is constructed to capture the relation between profit and the level of output, holding other variables, especially those affecting the total revenue and total cost curves, constant. This is one of three methods typically used to determine the profit-maximizing quantity of output produced by a firm. The other two methods are total revenue and total cost and marginal revenue and marginal cost.

     See also | profit | perfect competition | short-run production | firm | quantity | total revenue | total cost | profit maximization | production | marginal revenue | marginal cost | profit curve, monopolistic competition | profit curve, monopoly |

PROFIT CURVE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: May 13, 2021].

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The proportion of each additional dollar of household income that is used for saving. The marginal propensity to save (abbreviated MPS) is another term for the slope of the saving line and is calculated as the change in saving divided by the change in income. The MPS plays a central role in Keynesian economics. It quantifies the saving-income relation, which is the flip side of the consumption-income relation, and thus it reflects the fundamental psychological law. It is also a critical to the multiplier process. A related saving measure is the average propensity to save.

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