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

Quizplus · Accepted Answer

Maximizing profit means finding the point where the difference between total revenue and total cost is the greatest. It is not necessarily about maximizing profit per unit of output or maximizing total revenue alone. Minimizing total cost may help increase profit, but it is not the only factor to consider when maximizing profit. Therefore, the best choice is B - maximizing the difference between total revenue and total cost.

When a Firm Is Maximizing Profit, It Will Necessarily Be