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Efficiency condition - PowerPoint PPT Presentation

The assumption of maximizing behavior lies at the heart of economic analysis.

The assumption of maximizing behavior lies at the heart of economic analysis. Firms are assumed to maximize economic profit. Economic profit is the difference between total revenue and total costs. Cost used in the calculation of economic profit are opportunity costs.

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Efficiency condition - PowerPoint PPT Presentation

The assumption of maximizing behavior lies at the heart of economic analysis.