Suppose the Utility Function for a Firm Manager Is U $\pi$

question 26

Multiple Choice

Suppose the utility function for a firm manager is U = $\pi$ + bQ, where Q is output, $\pi$ is profit, and b is a positive constant.How would the firm's output compare with what it would be if the manager's objective was to maximize profit?

• A)It would be greater than the profit-maximizing output.
• B)It would be less than the profit-maximizing output.
• C)It would be the same as the profit-maximizing output.
• D)None of the statements associated with this question are correct.

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Definitions:

Eating Disorders

Mental disorders characterized by abnormal or disturbed eating habits that significantly affect an individual’s health and well-being, such as anorexia nervosa, bulimia nervosa, and binge-eating disorder.

Purging Behaviour

Actions taken to try to rid the body of consumed food and calories, typically observed in eating disorders, including self-induced vomiting or misuse of laxatives.

Anorexia

An eating disorder characterized by an abnormally low body weight, an intense fear of gaining weight, and a distorted perception of body weight or shape.

Bulimia

An eating disorder marked by binge eating followed by methods to avoid weight gain, such as vomiting or excessive exercise.