Business objectives Flashcards
1
Q
What is the most common business objective
A
To profit maximise
2
Q
Where is profit maximisation met?
A
Where MR = AR
3
Q
Why does revenue maximisation occurs (Baumol)
A
Baumol suggested managers are interested in their level of revenue since their salary depends on it
4
Q
Where does revenue maximisation occur
A
Where MR = 0
5
Q
Why may firms sales maximise
A
Easier for people to judge the level of growth
Size is often linked with security
Growth will increase market share
(tends to be a short term objective whilst profit is long term)
6
Q
Where is sales maximisation
A
Where AC = AR
