Question

If the total revenue from product A is greater than the total revenue from product B then is that optimizing? My intuition tells me that the firm is not optimizing, but how or why is that not the case?

Answer 1

The given statement is false and this is because even though the revenue for product A is high there can be a chance that the cost for product A is very high such that it out crosses the additional revenue from that of B result of which you can understand that B will have more profit under such circumstances and that is the reason why just because you have the revenue more, cannot see that it is optimising where in order to optimise you should have maximum profit and not maximum revenue