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

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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 firms 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 consumers willingness to pay....
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This note was uploaded on 11/26/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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