If a firm is maximizing its profit, it will choose an operating structure in which its fixed costs are less than its variable costs.

Question

Quizplus · Accepted Answer

A firm maximizes profit by choosing an operating structure that aligns with its production and market conditions, not necessarily by having fixed costs less than variable costs. The decision depends on factors like scale, industry, and cost behavior.

If a Firm Is Maximizing Its Profit, It Will Choose