Which of the Following Is a Reason Why a Firm

question 76

Multiple Choice

Which of the following is a reason why a firm may not maximize profits?

• A)Firms have limited resources and so must make imperfect decisions.
• B)Profit maximizing price and output level is often very difficult to determine.
• C)Managers may be more interested in maximizing their salaries, rather than profits.
• D)Firms do not know exactly what their marginal revenue and marginal cost curves are.
• E)All of the above.

---

Definitions:

Withdraw

Withdrawing money from a bank account or an investment.

Monthly Compounded

Interest that is calculated on the principal and previously earned interest once every month.

Nominal Rate

The advertised or stated rate of interest, not including the effects of inflation or compounding.

RRSP

Registered Retirement Savings Plan, a savings and investment vehicle for Canadians to save for retirement in a tax-efficient way.