# Profit Maximization

## At the point of equilibrium of firm (under perfect competition):

A. MC curve must be rising B.MC curve must be falling C.MR curve must be rising D.None of these

## Normal profit is:

A. Part of total cost B.Part of economic profit C.Total revenue minus total cost D.Total revenue minus implicit cost

## Economic profit is:

A. Part of total cost B.Total revenue minus total cost C.Total revenue minus explicit cost D.Total variable cost minus total fixed cost

## A firm earns economic profit when total profit exceeds:

A. Normal profit B.Implicit costs C.Explicit costs D.Variable costs

## The basic goal of a firm is to:

A. Maximize revenues B.Maximize welfare of its employees C.Maximize profit D.Maximize output

## A firm’s MR exceeds its MC, maximum profit rule requires that firm to:

A. Increase in output in both perfect and imperfect competition B.Increase in perfect competition but not necessarily in imperfect competition C.Increase in output in imperfect but not necessarily in perfect competition D.Decrease in output in both perfect and imperfect competition

## Profit is maximum when:

A. TC and TR curves are parallel B.MC and MR curves are parallel C.TC and TR curves cross each other D.AC and AR curves cross each other

## The necessary condition for equilibrium position of a firm is:

A. MR = MC B.MC > Price C.MC = MR D.MC = AC