Economics 9708 · AS & A Level · 7.8

7.8 — practice question

The diagram illustrates a firm's cost and revenue curves. At present, the firm seeks to maximise sales provided that it earns a normal profit. What effect will there be on price and output if it switches its objective to revenue maximisation while keeping the same minimum profit requirement?

  • Aprice increases; output no change
  • Bprice increases; output reduces
  • Cprice no change; output no change
  • Dprice no change; output reduces

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