O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2016 · Q121 Mark

How does a firm guarantee that it makes the maximum profit?

Aby maximising the difference between its total revenue and total cost

Bby maximising the number of goods that it sells

Cby minimising the number of goods that it keeps in stock

Dby minimising the difference between average revenue and average cost

✓ Correct answer

A: by maximising the difference between its total revenue and total cost

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2016 Paper 1 Variant 1, question 12.

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