Business objectives Flashcards
1
Q
Why might firm aim to maximise profit?
A
- Maximise shareholder returns
- Retained profits for RnD, dynamic efficiency
2
Q
Why might firm aim to maximise sales?
A
- gain market share
- attract investors
3
Q
Why might firm aim to maximise revenue?
A
- fulfil managerial objectives
- Prevent new firms from entering the market
4
Q
Why might firm aim satisfice?
A
- to satisfy shareholders while also able to fulfil its own objective
5
Q
definition of satisficing
A
When business aims to make satisfactory level of profit rather than maximising.
6
Q
define profit maximizing
A
when the difference between total cost and total revenue is the greatest
7
Q
define revenue maximizing
A
when total revenue is the highest and marginal revenue is 0
