Quick answer Firms may pursue profit maximisation, revenue maximisation, sales growth, survival or social objectives. The objective chosen affects pricing, output, investment and how the firm responds to competition. Key ideas at a glance Objective Likely decision Useful evaluation Profit maximisation Choose output where marginal revenue equals marginal cost Depends on market power and information Revenue/sales maximisation Prioritise turnover or market share May reduce short

Quick answer Costs are the expenses of production, revenue is income from sales, and profit is revenue minus total cost. In the short run some inputs are fixed; in the long run all inputs can vary, changing the firm’s cost structure and decisions. Key ideas at a glance Measure Meaning Formula/use Fixed cost Does not vary with output in the short run Rent or machinery lease Variable cost Changes as output changes Wages for hourly production work Total revenue Income from sales

Compare internal and external growth, horizontal and vertical integration, conglomerates, cartels, economies of scale and principal-agent problems.

Compare perfect competition, monopolistic competition, oligopoly and monopoly by firms, barriers, pricing power, efficiency and real-world examples.