A firm's objective is to maximize its economic profit, which is: a) total revenue minus economic cost

Business Dec 28, 2020

A firm's objective is to maximize its economic profit, which is:

a) total revenue minus economic cost.

b) total profit minus total cost.

c) economic cost minus profit.

d) economic cost minus total revenue.

Expert Solution

The best answer is a) total revenue minus economic cost.

Economic profit is the difference between the total revenue received by a business and the total implicit and explicit costs of a firm. It's often the extra profit left over after considering the next best alternative investment and can be either positive or negative in value.

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