Economists normally assume that a firm would?
(i) sell a higher output if this would increase revenue
(ii) sell a lower output and collect less revenue, if this would increase profit
(iii) sell a higher output and incur more costs, if this would increase profit
A)(i) and (ii)
B)(i) and (iii)
C)(ii) and (iii)
D)none of the above

Question

Quizplus · Accepted Answer

Economists assume firms aim to maximize profit. Selling a lower output with less revenue can increase profit if costs decrease more than revenue. Selling a higher output with more costs can increase profit if revenue increases more than costs.

Economists Normally Assume That a Firm Would