Question 7
[Maximum number: 1]
A firm is operating at a level of output which corresponds to the point where MR=0.
What objective is the firm achieving?
A
maximising consumer surplus
B
maximising profit
C
maximising sales
D
maximising revenue
CAIE A-Level Economics 7.8.2 Alternative firm objectives
Practise comparing survival, satisficing, sales and revenue maximisation through output choices, diagrams and firm objectives.
How this is tested
- use MR, revenue and cost data to identify revenue or sales maximising output
- compare price and output effects when firms switch away from profit maximisation
- evaluate principal-agent motives for managers choosing growth, sales or satisficing