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Economics (AS & A Level) · Feb / March 2021 · Paper 32 · Question 11

9708Differing objectives and policies of firms

The diagram shows a monopolist's cost and revenue curves. The monopolist changes its price from P1 to P2 and its output from Q1 to Q2. Which change in objective is indicated by the move from P1 to P2?

  1. Aprofit maximisation to sales revenue maximisation
  2. Bprofit maximisation to sales maximisation subject to earning a normal profit
  3. Csales revenue maximisation to profit maximisation
  4. Dsales revenue maximisation to sales maximisation subject to earning a normal profit

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Correct answer: D. sales revenue maximisation to sales maximisation subject to earning a normal profit

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