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Basic Question 1 of 10

Perfectly competitive firms ______

A. maximize market share.
B. maximize total sales.
C. minimize total costs.
D. maximize profits.

User Contributed Comments 6

User Comment
DannyZhou So do all other types of firms?
EMerkert Monopolistic firms would first seek to maximize market share by undercutting competitors, once this is acheived then they can maximize profits by raising prices without much competition
udhay Why not B,In perfect competition firms can make max profit only thru max sales
Thescholar Maximising sales may lead to increased costs which may therefore not maximise profit
vatsal92 Profit is the sole motive of perfect competition firms.
fzhou MR = MC = ATC_min is profit maximizing rule.
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Learning Outcome Statements

explain relationships between price, marginal revenue, marginal cost, economic profit, and the elasticity of demand under each market structure;

describe a firm's supply function under each market structure;

describe and determine the optimal price and output for firms under each market structure;

explain factors affecting long-run equilibrium under each market structure;

CFA® 2024 Level I Curriculum, Volume 2, Module 9.