Profit-maximizing firms want to maximize the difference between ?
Correct answer: B. total revenue and total cost
- A. marginal revenue and marginal cost.
- B. total revenue and total cost
- C. total revenue and marginal cost
- D. marginal revenue and average cost
Explanation
Profit equals total revenue minus total cost, so a firm maximises profit by maximising this difference. The MR-MC rule is the condition used to locate that maximum, not the difference being maximised itself.
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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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