3.2 Business Objectives

Question 1

Neo Classical economists

Answer 1

Assumes interests of owners and shareholders are most important

Question 2

Profit maximisation

Answer 2

Goal of the firms is to profit maximise in short run in order to maximise owners returns which can also generate funds for investment and help to survive a slowdown during a recession

Question 3

Condition for SR profit maximisation

Answer 3

MC=MR

Question 4

William Baumol

Answer 4

Suggested managers are most interested in their level of revenue as that is what their salary is dependent on