The Most Commonly Accepted Objective for a Firm Is

question 162

Multiple Choice

The most commonly accepted objective for a firm is

• A) to stay in business at all cost.
• B) to maximize total revenue.
• C) to maximize economic profit.
• D) to minimize the variable cost outlay.

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Definitions:

Corporate Tax Rate

The percentage of corporate profits that companies are required to pay to the government as tax.

Fixed Costs

These are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Economy Strong

A state wherein an economy is experiencing robust growth, low unemployment, and increasing levels of consumer spending and business investment.

Operating Leverage

Operating leverage describes the degree to which a company can increase its profits by increasing sales, reflecting the proportion of fixed costs to variable costs.