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Economics (AS & A Level) · Oct / Nov 2023 · Paper 32 · Question 6

9708Differing objectives and policies of firms

A firm changes its aim and chooses to produce where marginal revenue (MR) is zero instead of where MR is equal to marginal cost (MC). Which explanation for this is not correct?

  1. AThe firm wishes to increase sales.
  2. BThe firm wishes to increase its output.
  3. CThe firm wishes to reduce prices.
  4. DThe firm wishes to gain more profits.

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Correct answer: D. The firm wishes to gain more profits.

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