When a firm is maximizing profit,it will necessarily be:

A) maximizing profit per unit of output.
B) maximizing the difference between total revenue and total cost.
C) minimizing total cost.
D) maximizing total revenue.

Question

Dayna Fairhurst · Accepted Answer

Final Answer : B, Explanation :  When a firm is maximizing profit, it is trying to obtain the highest possible difference between total revenue and total cost. This means that it is not only concerned with maximizing profit per unit of output, but also with producing and selling as much as possible, as long as the additional revenue obtained from each unit sold exceeds its cost. While minimizing total cost is important, it is not the main goal of profit maximization, as long as the cost is being outweighed by the revenue obtained. Maximizing total revenue alone is also not enough, since a firm may be able to increase revenue but at the cost of higher expenses that ultimately reduce its profit.

When a firm is maximizing profit,it will necessarily be:

A) maximizing profit per unit of output.
B) maximizing the difference between total revenue and total cost.
C) minimizing total cost.
D) maximizing total revenue.

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Learning Objectives

Learning Objectives

Related questions

When a firm is maximizing profit,it will necessarily be:A) maximizing profit per unit of output.B) maximizing the difference between total revenue and total cost.C) minimizing total cost.D) maximizing total revenue.

Definitions

Learning Objectives

Learning Objectives

Related questions

When a firm is maximizing profit,it will necessarily be:

A) maximizing profit per unit of output.
B) maximizing the difference between total revenue and total cost.
C) minimizing total cost.
D) maximizing total revenue.