Explain difference between a firms revenue and its profit


Discussion Questions :

1. Give an example of an opportunity cost that an accountant might not count as a cost. Why would the accountant ignore this cost?

2. Explain the difference between a firm's revenue and its profit. Which do firms maximize?

3. Give an example of a government-created monopoly. Is creating this monopoly necessarily bad public policy? Explain.

4. How might advertising reduce economic well-being? How might advertising increase economic well-being?

5. What is the prisoners' dilemma, and what does it have to do with oligopoly?

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Microeconomics: Explain difference between a firms revenue and its profit
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