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Economics (AS & A Level) · Oct / Nov 2021 · Paper 32 · Question 8

9708Differing objectives and policies of firms

A firm maximises its profits by maximising its total revenue. What does this imply?

  1. AAverage fixed cost is zero.
  2. BAverage revenue is equal to average cost.
  3. CMarginal cost is zero.
  4. DMarginal revenue is greater than marginal cost.

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Correct answer: C. Marginal cost is zero.

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