Edexcel A-Level Economics A2 3.3.1 3a Different Business Objectives Objectives Profit Maximisation Revenue Maximisation Questions

Practise comparing profit, revenue, sales and satisficing objectives using diagrams, extracts and decisions about price, output and profit.

Exam points

interpret diagrams to distinguish profit maximisation, revenue maximisation and sales without loss
explain how a change of objective alters price, output, market share and supernormal profit
identify satisficing as an acceptable level of profit and sales in an ownership-control context
evaluate revenue against profit using contestability, survival, market share and short- or long-run aims
assess whether state-owned and private firms differ in profit, service, social or survival objectives

[Maximum number: 1]

A profit maximising firm decides to change its objective to revenue maximisation.
Which one of the following combinations is the most likely impact of this decision?

Option

Supernormal profit

Price

No change

Increase

Decrease

Increase

No change

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Edexcel A-Level Economics A2 3.3.1 3a Different Business Objectives Objectives Profit Maximisation Revenue Maximisation Questions question 1