3.2.1 Business objectives-

Question 1

Different business objectives

Answer 1

• profit maximisation
• revenue maximisation
• sales maximisation
• satisficing

Question 2

Profit maximisation

Answer 2

When MC = MR:
The level of output at which the greatest amount of (supernormal) profit is made

Question 3

How can firms make more profit?

Answer 3

• increasing D(AR)
• decreasing AC

Question 4

Revenue maximisation

Answer 4

When MR = 0: the level of output at which the greatest amount of revenue is made

Question 5

Sales maximisation

Answer 5

When AR = AC: the level of output at which the most output is sold