BUSINESS OBJECTIVES

Question 1

PROFIT MAXIMISATION

Answer 1

A business aiming to maximise profits would operate at MC=MR

Question 2

REVENUE MAXIMISATION

Answer 2

Revenue is maximised at MR=0
If a firm is maximising revenue they will keep increasing output past the point where profit is maximised as adding more output leads to greater revenue

Question 3

MAXIMISING SALES

Answer 3

A firm which is trying to maximise sales would produce at the level AR=AC
If sales increased any further than this then they would be making a loss.