3.2 - Revenue Maximising

Question 1

Revenue Maximisation point

Answer 1

MR = 0
Can’t generate any additional revenue

Question 2

Revenue max. incentive

Answer 2

Deter market entry
No profit entry incentive
Maintain power + LR returns

Question 3

Revenue max. consequence

Answer 3

Drop in share prices
Lost profitability

Question 4

Managerial revenue max. incentive

Answer 4

Salaries/rewards linked closer to sales/revenues than profits