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A firm - So the firm has to keep its cost of production as...

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A firm: Profit A firm may be a producer, seller, trader, exporter or a financier. In any one of these capacities, firms show similar basic tendencies. In order to maximize its profits a firm has to maintain as large a difference between what it spends on resources or cost of production and what it earns by selling goods in the form of revenue or returns . The difference between the two is the firm’s profit
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Unformatted text preview: . So the firm has to keep its cost of production as low as possible. On the other hand, it has to charge a high price and sell as much quantity of products as possible. In this respect, the firm’s actions are related to the behavior of consumers. Besides the limitation of cost of production, the capacity of a firm to charge a suitable price is restricted by the consumer’s willingness to pay....
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