Business Objectives

Question 1

Reasons why some firms may Profit maximise ?

Answer 1

1- Provides a financial return to the owners/shareholders.
2- Attracts investors and capital.
3- Indicates efficient resource allocation and cost control.
4- Often a primary goal for profit-driven organizations.

Question 2

Reasons why some firms may revenue maximise ?

Answer 2

Objective: maximize TR from the sale of goods or services.
reasons:
1- Focuses on increasing market share and capturing a larger customer base.
2- May be used when a company wants to establish its presence in the market quickly.
3- Can lead to higher long-term profits if accompanied by cost control.

Question 3

Reasons why some firms may sales maximise ?

Answer 3

Objective: maximize the number of units sold, regardless of profit.
reasons:
1- Common in industries where competition is intense, and market share is crucial.
2- May be used to maintain a dominant market position.
3- Can be a strategic choice to deter new entrants.

Question 4

Reasons for satisficing ?

Answer 4

Objective: achieve a satisfactory level of profit or performance, rather than maximizing it.
reasons:
1- May prioritize other goals, such as employee satisfaction, social responsibility, or long-term sustainability.
2- Reduces the pressure to continually push for higher profits.

Question 5

Profit maximise on the diagram and the formula:

Answer 5

Profit maximise: MC=MR
Profit= TR-TC

Question 6

Revenue maximise on the diagram and the formula:

Answer 6

Revenue maximise: MR=0
Total revenue= Price x Quantity sold.

Question 7

Sales maximise on the diagram and the formula:

Answer 7

Sales maximise: AR=AC
sales(Q) = Demand