In constructing a short-run aggregate supply curve, what would an economist assume is the goal of business?
A) to maximize sales revenue
B) to maximize profit
C) to maximize growth in sales
D) to minimize cost

Question

In constructing a short-run aggregate supply curve, what would an economist assume is the goal of business?  
A) to maximize sales revenue 
B) to maximize profit 
C) to maximize growth in sales 
D) to minimize cost

Quizplus · Accepted Answer

The assumption in constructing the short-run aggregate supply curve is that businesses seek to maximize profits in the short run. This means that businesses aim to produce goods and services at a level of output where marginal cost equals marginal revenue, as this is where they can achieve the highest level of profit.

In Constructing a Short-Run Aggregate Supply Curve, What Would an Economist