The key assumption underlying the theory of the firm is that:

A) firms are assumed to maximize sales revenue.
B) managers are assumed to maximize the number of employees in their department.
C) firms are assumed to maximize profits.
D) none of the above

Theory Of The Firm

Explanation of how a firm makes cost-minimizing production decisions and how its cost varies with its output.

Maximize Profits

The process of adjusting production and sales strategies to achieve the highest possible financial gain.

Sales Revenue

The total amount of money generated from the sale of goods or services before any costs or expenses are subtracted.