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Economics (AS & A Level) · May / June 2021 · Paper 32 · Question 12

9708Differing objectives and policies of firms

The diagram shows a firm in imperfect competition. It changed its aim from profit maximising to sales revenue maximising. Which type of profit was it making in each case?

  1. Aprofit maximising: normal profit; sales revenue maximising: supernormal profit
  2. Bprofit maximising: subnormal profit; sales revenue maximising: normal profit
  3. Cprofit maximising: supernormal profit; sales revenue maximising: normal profit
  4. Dprofit maximising: supernormal profit; sales revenue maximising: supernormal profit

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Correct answer: D. profit maximising: supernormal profit; sales revenue maximising: supernormal profit

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