Microeconomic Decision Makers · 4 question types
Past paper frequency (2018 to 2024)
This topic accounts for approximately 10% of your exam marks.
Fixed vs variable costs, profit calculations, and average cost appear regularly across both Section A and Section B questions.
A firm's owners decide what the firm is trying to achieve. Four objectives recur in IGCSE questions.
| Objective | What the firm prioritises |
|---|---|
| Profit maximisation | Maximising the gap between TR and TC. The textbook "rational" objective and the default for most private firms. |
| Growth | Maximising revenue, market share, or number of employees rather than profit, often to access economies of scale. |
| Survival | Staying in business at all costs. Common for new start-ups (roughly a quarter of newcomers do not last 12 months) and for established firms during recessions. |
| Social welfare | Producing benefits for society or the environment alongside profit. Common for charities, social enterprises and sustainability-focused businesses. |
Objectives can change over time. A firm might focus on survival in its first year, switch to growth once it is established, then settle into profit maximisation as a mature business. A previously profit-focused firm might switch to social welfare if its owners or shareholders increasingly value sustainability.