Firms are assumed to ________ costs and to ________ profits?
Correct answer: D. minimize, maximize
- A. incur, desire
- B. pay, make
- C. charge earns
- D. minimize, maximize
Explanation
The standard assumption is that firms seek to minimise the costs of producing a given output and maximise their profit. Paying or incurring costs alone does not describe the firm's objective.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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