What does a firm wish to achieve?what three conditions must hold for a profit maximising firm in the short run?
Answers
Answer:
The following three conditions must hold if a profit maximising firm produces positive level of output (say equilibrium output Q*) in a competitive market: 1) MR must be equal to MC at Q*. 2) MC should be upward sloping or rising at Q*. 3) In short run − Price must be greater than or equal to AVC.
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A firm is an official organization of rule and regulations where the several people comes under a contract to put up his/her efforts for the attainment of the goals and objectives.
EXPLANATION-
As every frim is create a product or service to serve the market in lie of earning profits. So, the three wishes of a firm are Market share, Profit maximization as well as financial stability. These three are the main motivation on which every frim works to bring for the growth and development of the business entity.
The profit maximization is one of the main focused points for the firm. As profit show that firm is able to sale out its products and service at vast level and creating good market share with the products detail.
Conditions to be add on for the profit maximization can be -
• Creating awareness on how the product offered by the company stands out from the availability of other options. How to create awareness that product is of good quality and affordable price range to target a huge number of customers.
• Provide different discounts and extra services to attract more consumers and customers to increase the sales by a unit that adds on to the increment to the profit percentage of the firm in the short run.
Hence, these can be done by the firm owner to increase the profit maximization share for the short run.
Learn more about the frim wishes and ways to profit maximization in the short run- https://brainly.in/question/5995366