3.1 Business objectives Flashcards
1
Q
What is a firm?
A
An organization that brings together factors of production in order to produce output.
2
Q
What is normal profit?
A
the return needed for a firm to stay in the market for the long term.
3
Q
What is supernormal profit?
A
Profits above normal.
4
Q
What is Profit Maximization?
A
MC=MR
5
Q
What is sales revenue maximization?
A
MR=0
6
Q
What is sales volume maximization?
A
AC=AR
7
Q
What’s the aims of firms?
A
Maximize profit
8
Q
What sort of objective is profit maximization?
A
Long run.
9
Q
Why does a firm sacrifice short term profit?
A
To make profit in the long term/
