<Li> Optimality and constrained optimization models--Other examples of quantitative models are based on principles such as profit or utility maximization . An example of such a model is given by the comparative statics of taxation on the profit - maximizing firm . The profit of a firm is given by </Li> <Dl> <Dd> <Dl> <Dd> π (x, t) = x p (x) − C (x) − t x (\ displaystyle \ pi (x, t) = xp (x) - C (x) - tx \ quad) </Dd> </Dl> </Dd> </Dl> <Dd> <Dl> <Dd> π (x, t) = x p (x) − C (x) − t x (\ displaystyle \ pi (x, t) = xp (x) - C (x) - tx \ quad) </Dd> </Dl> </Dd> <Dl> <Dd> π (x, t) = x p (x) − C (x) − t x (\ displaystyle \ pi (x, t) = xp (x) - C (x) - tx \ quad) </Dd> </Dl>

Difference between a theory and a model in economics