Cost & Revenue Analysis... Continued

What constraints limit profit maximization? 
These would typically be markets and technology.

Market constraints are conditions under which a firm buys input and sells output. On the input side, limited supply of resources means higher prices for additional units. On the output side, limited demand for goods & services means lower prices for additional units.

Technology constraints are limits to the quantity of output that can be produced using given quantities of inputs.

Therefore, to maximize profits, a firm must be technologically efficient, i.e., not using more inputs than necessary to produce a given output and economically efficient, i.e., producing a given output at the lowest possible cost.

The Production Side of the Analysis Process
Production is the creation of goods or services with economic value to consumers or other producers.  This includes physical processing or manufacturing of material goods or production of services such as transportation, legal, teaching, etc. The goal is how to produce the desired output by combining input efficiently, given existing constraints (budget, technology etc.)