We assume that firms, when they are deciding the best rate of output at which to produce

Name: We assume that firms, when they are deciding the best rate of output at which to produce
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Question

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Firms ultimately want to maximize profits, which are equal to total revenues minus total costs. While maximizing sales or getting the highest price possible may lead to higher revenues, minimizing costs is also important in order to increase profits. However, the ultimate goal is to maximize profits.

We Assume That Firms, When They Are Deciding the Best