3.2 Flashcards
1
Q
Profit Maximisation
A
Gain the highest amount of profit.
Maximum amount of profit.
MC = MR
2
Q
Revenue maximisation
A
Seek to maximise revenue
MR = 0
3
Q
Sales maximisation
A
Seek to maximise sales without making a loss.
AR = ATC
4
Q
Profit satitsficing
A
A level of profit below profit maximisation that satisfies the needs of owners and managers.
5
Q
Marginal Cost
A
The cost of producing one additional unit
6
Q
Marginal revenue
A
Revenue received for selling one more unit.
7
Q
The divorce of ownership and control
A
Shareholders and managers have different objectives.
8
Q
Revenue maximisation
A
MR = 0
Where firms produce at the point that generates them the maximum level of revenue.
