Which of the following is true?
a. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its total revenues and total cost.
b. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its average revenue and average total cost.
c. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its average revenue and average variable cost.
d. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its marginal revenue and marginal cost.
a
You might also like to view...
Suppose a price searcher faces the following demand curve: At $100, $90, $80, $70, and $60, the quantity demanded is 1, 2, 3, 4, and 5 units respectively. If the firm's marginal cost is $40 at any level of output, it would maximize net revenues by
A) producing 5 units and charging $60. B) producing 4 units and charging $70. C) producing 3 units and charging $80. D) producing 2 units and charging $90.
Macroeconomics is the study of economy-wide phenomena
a. True b. False Indicate whether the statement is true or false