Economists normally assume that the goal of a firm is to
A)maximize its total revenue.
B)maximize its profit.
C)minimize its explicit costs.
D)minimize its total cost.

Question

Quizplus · Accepted Answer

The goal of a firm is to maximize its profit, which is the difference between total revenue and total costs. While minimizing costs is an important component of profit maximization, it is not the sole goal of the firm. Similarly, while maximizing revenue may be important for some firms, it does not necessarily lead to profit maximization.

Economists Normally Assume That the Goal of a Firm Is