In electrical engineering, the maximum power transfer theorem states that, to obtain maximum external power from a source with a finite internal resistance, the resistance of the load must equal the resistance of the source as viewed from its output terminals. Moritz von Jacobi published the maximum power (transfer) theorem around 1840; it is also referred to as "Jacobi's law".
The theorem results in maximum power transfer, and not maximum efficiency. If the resistance of the load is made larger than the resistance of the source, then efficiency is higher, since a higher percentage of the source power is transferred to the load, but the magnitude of the load power is lower since the total circuit resistance goes up.
If the load resistance is smaller than the source resistance, then most of the power ends up being dissipated in the source, and although the total power dissipated is higher, due to a lower total resistance, it turns out that the amount dissipated in the load is reduced.
The theorem states how to choose (so as to maximize power transfer) the load resistance, once the source resistance is given. It is a common misconception to apply the theorem in the opposite scenario. It does not say how to choose the source resistance for a given load resistance. In fact, the source resistance that maximizes power transfer is always zero, regardless of the value of the load resistance.
The theorem can be extended to AC circuits that include reactance, and states that maximum power transfer occurs when the load impedance is equal to the complex conjugate of the source impedance.
Read more about Maximum Power Transfer Theorem: Maximizing Power Transfer Versus Power Efficiency, Impedance Matching, Calculus-based Proof For Purely Resistive Circuits, In Reactive Circuits
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