The reason economists assume that firms try to maximize economic profit is that _____
A)firms that don't earn profits will, over time, have difficulty securing financing to survive.
B)firms in the real world always maximize profit.
C)profit is easier to calculate than revenue.
D)if a firm fails to earn a profit in its first year, it will go out of business.
E)profit maximization is easier for firms than revenue maximization.

Question

Quizplus · Accepted Answer

Firms that consistently fail to earn a profit will eventually have difficulty securing financing or attracting investors to continue operating in the long run. Therefore, it makes sense for economists to assume that firms try to maximize their profits as a way to ensure their survival.

The Reason Economists Assume That Firms Try to Maximize Economic