Question

What is the most desirable rate of output?

Answer 1

The most desirable rate of output can be achieved by maximizing the total profit . Total profit is the difference between the total revenue and the total cost .

Total profit = Total revenue - Total cost

As this difference increases it maximizes the total profit . For this the firm must know the amount of revenue they gain by selling all the goods and services , as well how much money they spend for producing this goods and services.Profit could be achieved by a firm when they use less resources and more number of labours to produce high quality goods and services . Thus it increases the productivity and increases the rate of output .