Optimum

The very "best" possible situation or state of affairs according to some explicit objective that provides a precise standard of evaluation. For example, if a business firm's objective is to make the biggest profits possible (as economists generally assume it is), then the firm's optimal level of output at any given level of sales prices and production costs is that at which its profits will be the highest possible. Most of economics is concerned with analyzing how individuals or groups of people or even whole societies may achieve optimal use of available resources, and it is normally assumed that the maximum satisfaction of people's individual wants or desires [see: utility] is the objective of the economy that provides the relevant standard of evaluation. (Social critics, moral philosophers, religious thinkers, and political power-seekers in their various ways have often disputed the validity of this individualistic standard of evaluation, of course.)

[See also: marginal analysis]