Theme 3: Buisness Objectives

Question 1

Revenue max

Answer 1

MR=0
Maximising revenue they will keep increasing output past the point where the profit maximised as long adding more output leads to greater revenue

Question 2

Sales max

Answer 2

AR=AC
-highest level of output the firm can sustain in the long run
-sales increased further the firm would make a loss

Question 3

Profit maximising

Answer 3

MR=MC

Question 4

Satisficing

Answer 4

-just enough satisfy important stakeholders instead of aiming to max profit
-enough profit to stop shareholders getting too concerned

Question 5

Profit maximising advantages

Answer 5

-retained profits cheap finance saves paying high interest rates
-somes firms might profit maximise in the short run since consumers do not like rapid price changes in the sort run