In Reality, Decisions Made by Firms May Not Always Produce

question 137

Multiple Choice

In reality, decisions made by firms may not always produce maximum total profit because some executives

• A)are more motivated by altruism.
• B)are more interested in market share than profits.
• C)may push research and development to the point that profits decline.
• D)All of the responses are correct.

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Definitions:

Gross Domestic Product

The total market value of all final goods and services produced within a country in a given period of time, typically annually.

Inventories

Raw materials, work-in-progress goods, and completely finished products that companies hold to facilitate business operations.

Intermediate Goods

Products that are used as inputs in the production of other goods or services rather than being bought by consumers.

Final Output

The total value of all goods and services produced and sold for final use in the economy, avoiding duplication by excluding intermediate goods.