Company Growth Flashcards
0
Q
Where is profit maximisation?
A
MR=MC
1
Q
What are the main firm objectives?
A
Profit maximisation Revenue maximisation Increasing and protecting market share Providing a public service Satisficing behaviour
2
Q
Why is it difficult to calculate profit maximisation?
A
- imperfect information
- multi-product business
3
Q
What is satisficing behaviour?
A
When a business aims for acceptable levels of achievement in terms of profit and revenue
4
Q
What is cost plus pricing?
A
Average cost + profit margin
5
Q
Where is revenue maximisation?
A
MR=0
6
Q
What are the reasons for growth?
A
Profit-> stock market valuation Cost-> economies of scale Market power Risk-diversification Managerial motives
7
Q
Benefits of horizontal growth
A
Reduced competition
Synergies
Wider range of products
Economies of scale
8
Q
Benefits of vertical growth
A
Greater of control of supply and retail distribution
9
Q
What is revenue?
A
Money coming in from the sale of g&s over a given period of time
10
Q
What is the TR curve for a normal demand curve?
A
A 45 degree line from axis
