3.2 Business objectives

Question 1

3.2.1 A)
What are the diff busniess objects

Answer 1

Profit maximisation
revenue maximisation
sales maximization
satisficing

Question 2

3.2.1 A)
Why/why not profit max and formula

Answer 2

PM happens MC = MR
why?
Reinvestment
Dividens for stakeholders
lower costs & prices for consuners
rewards for enturpenurship
why not ?
Dont know where mc=mr
if ^ profit might be looked into by regulators v profit LR
stakeholder may be harmed
other objects may be more important

Question 3

3.2.1 A)
Why rev max and formula

Answer 3

MR = 0
why?
Acess to economies of scale
predatory pricing (undercutting to remove comp)
principle agent problem

Question 4

3.2.1 A)
Why sales max and formula

Answer 4

AC=AR
why?
economies of scale
limit prices > limit people entering market
principle agent problem
flood the market > product awareness > loyalty.

Question 5

3.2.1 A)
Why satify max

Answer 5

^ price consmer, worker may get paid less
reputation