In general, economists assume that firms

Question

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Economists assume that firms aim to maximize economic profits, which takes into account both explicit (accounting) and implicit (opportunity) costs. Maximizing economic profits ensures the most efficient allocation of resources and long-term viability of the firm. Choosing option A) would be too narrow as it only considers accounting profit, which may not accurately reflect the true profitability of a firm. C) and D) are also insufficient as merely maximizing sales or revenue does not necessarily result in maximum profits.

In General, Economists Assume That Firms