ECONOMICS MICRO ECONOMIC THEORY III

A firm is a decision making unit/entity which through process of production converts inputs into outputs. The producer is assumed to be motivated by the objective of maximizing profits where: Profit= Gross revenue-Expenditure   TR TC TR  PQ Where P is the output price and Q is the output Other objectives of the firm include:  Revenue maximization  Cost minimization  Market share maximization It is assumed that the objective of a firm is to maximize profits but s...