Which of the Following Best Defines Objective Functions

question 3

Multiple Choice

Which of the following best defines objective functions?

• A) They are limitations, requirements, or other restrictions that are imposed on any solution in an optimization model.
• B) They are quantities that an optimization model seeks to maximize or minimize.
• C) They are quantities for which no feasible solutions exist in an optimization model.
• D) They are unknown values that an optimization model seeks to determine.

---

Definitions:

Perfectly Competitive Markets

Markets in which no individual producer or consumer has the market power to influence prices, characterized by many buyers and sellers, homogeneous products, and free entry and exit.

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, measuring the excess over the opportunity cost of capital.

Free Entry

A market condition where firms can freely enter or exit the market without facing significant barriers to entry or exit.

Rent-a-Wreck Industry

The business sector that specializes in renting out older, often pre-owned vehicles at reduced rates compared to standard rental services.