The weak axiom of profit-maximizing behavior states that in a modern mixed economy, firms have only a weak incentive to maximize profits.

Question

Quizplus · Accepted Answer

In a modern mixed economy, firms have a strong incentive to maximize profits. However, they may face constraints such as regulations, competition, and social responsibility, which can limit their ability to fully maximize profits. Therefore, the axiom should state that firms have a strong incentive but may be constrained in their ability to maximize profits.

The Weak Axiom of Profit-Maximizing Behavior States That in a Modern