Business Objectives

Question 1

What are the different business objectives

Answer 1

Profit Maximisation
Revenue Maximisation
Sales Maximisation
Satisficing

Question 2

What did William Baumol argue

Answer 2

Managers set out with the objective of maximising revenue

Question 3

What will a revenue-maximising firm produce more of than a profit-maximising firm and how

Answer 3

Output

Charging lower prices in order to sell the extra output

Question 4

Where does revenue maximisation point occur on the graph

Answer 4

At the level of output at which marginal revenue = 0

Question 5

What did Baumol say about revenue maximisation

Answer 5

Shareholders may not be too pleased

The way the firm behaves depends upon the degree of accountability that the agents have to the principles - result may be a compromise solution between the principals and the agents - output between qπ and qr

Question 6

Small Firms Business Objectives

Answer 6

Business Survival

Revenue Maximisation

Profit Maximisation

Cost Efficiency and Scale