Use the decisive difference to choose the correct explanation. The final column links to the full discussion.
| Concepts | Decisive difference | Why it matters | Read more |
|---|---|---|---|
| Profit / revenue maximisation | Relevant MR=MC crossing / MR=0, subject to constraints. | Read price from AR after finding output; revenue is not profit. | p. 13 |
| Revenue / sales volume maximisation | Highest TR / highest Q allowed by the stated constraint. | With break-even, sales maximisation uses the higher AR=AC crossing. | p. 13 |
| Normal profit / shutdown | TR=TC including opportunity cost / variable costs cannot be covered in the short run. | Normal profit keeps enterprise in the industry; a loss need not trigger immediate shutdown. | p. 33 |
| Diminishing returns / diseconomies of scale | A fixed input in the short run / all inputs variable in the long run. | Use marginal productivity for the first and LRAC for the second. | p. 28 |
| Monopoly / monopsony | Power as a seller / power as a buyer. | Read monopoly price from AR and monopsony wage from labour supply. | p. 64 |