3.2.1 business objectives

Question 1

profit maximisation

Answer 1

maximised where mr = mc
used for:
-r&d
- dividens for shareholders
- lower costs and prices for consumers
however:
- may be greater scutiny, regulators think ur doing something dogy (low standards or shortcuts with costs)
- may be more apporpiate options

Question 2

revenue maximisation

Answer 2

revenues maximised where MR=0
- economies of scale
- principle agent problem: may decide to revenue max to go to shareholders for perks

Question 3

sales maximisation

Answer 3

producing the largest amount possible whilst maintaining normal profits
AC=AR
- economies of scale
- principle agent problem
- floods the market and develop loyalty

amazon

Question 4

satisficing

Answer 4

when a business sacrificise profits to satisfy as many key stakeholders as possible
- shareholders= happy = recive higher dividents
- managers= happy= recieve bonuses
- consumers = unhappy= excess prices being charged= bad rep
- workers=unhappy=wages low as a result of cost cutting = striking
- gov=unhappy= because low wages and high prices= investigate which is against the business
- envirnent=unhappy= if costs cut and environment takes a hit such as increased pollution=protest and attack on socials

Question 5

social enterprises

Answer 5

businesses with profits reinvested for social aims - people and planet