Asked by Ogheneruno Siakpebru on Jun 12, 2024
Verified
The quantity corresponding to the point where the distance between price and ATC is the greatest results in a maximum ____________;but the firm wishes to maximize __________.
A) total profit;profit per unit
B) profit per unit;total profit
C) total profit;total profit
D) profit per unit;profit per unit
Total Profit
The total revenue of a business after subtracting all costs and expenses related to its operation.
Profit Per Unit
Profit per unit is the amount of money earned from selling one unit of a product or service, calculated by subtracting the cost per unit from the selling price per unit.
- Analyze the role of cost curves and market price in shaping output decisions.
Verified Answer
JH
Jeslie HernandezJun 17, 2024
Final Answer :
B
Explanation :
The quantity where the distance between price and ATC is greatest results in maximum profit per unit, but the firm ultimately wants to maximize total profit. Therefore, the best choice is B, which reflects that the firm should aim to maximize profit per unit in order to ultimately maximize total profit.
Learning Objectives
- Analyze the role of cost curves and market price in shaping output decisions.