Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 14 - Part V - Firms in Competitive Markets - Questions for Review - Page 296: 2

Answer

A firm's revenue is the total income of the firm. The profit of the firm is the financial gain of the firm, which can be calculated by subtracting total costs from total revenue.

Work Step by Step

Firms always try to maximize their financial gain, their profit. If they tried to maximize their revenue, their costs would go too high, and it is possible that they would not earn any profit.
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