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Economics · May / June 2016 · Paper 12 · Question 12

2281Firms’ costs, revenue and objectives

How does a firm guarantee that it makes the maximum profit?

  1. Aby maximising the difference between its total revenue and total cost
  2. Bby maximising the number of goods that it sells
  3. Cby minimising the number of goods that it keeps in stock
  4. Dby minimising the difference between average revenue and average cost

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Correct answer: A. by maximising the difference between its total revenue and total cost

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