Key Diagram: Profit, Satisficing, Revenue

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21st October 2016
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Diagram showing different objectives of firms

firms-profit-revenue-satisficing

  • Q1 = Profit maximisation (MR=MC)
  • Q2 = Revenue Maximisation (MR=0)
  • Q3 = Marginal cost pricing (P=MC) – allocative efficiency
  • Q4 = Sales maximisation – maximum sales whilst still making normal profit (AR=ATC)

Source: economicshelp

 

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