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Why maximizing shareholers' wealth is always the goal of a firm instead of maximizing profits of the firm's?
Wiki User
∙ 14y ago
The foundation of a firm is the investment, the wealth of its promoters and more importantly the share holders. Share holders have invested their money in the firm basing on the confidence they have on the firm and believing that their investment will be safe and will fetch good reasons. Once their trust is shaken, it will ruin the firm. On account of all these, the primary goal of a firm is to maximise the share holders' wealth.
Wiki User
∙ 14y ago
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Will a monopoly always produce at a profit-maximizing level of output?
Most businesses aim to operate at its profit-maximizing level at all times, but many factors make this nearly impossible. For instance, if they are short on workers they wouldn't be able to maximize profits.
Prove that profit maximizing firm will always minimise?
Profit is equal to total revenue minus total costs, if a firm wants to maximize its profit it has to lower the cost of producing a given level of output and or increase the item price if there is a willing buyer. If a firm is not minimizing costs then there exists a way for the firm to increase profits.
A profit maximizing monopolist with a positive marginal cost of production will always?
Produce in the elastic range of the demand curve
Why can firms not always reduce prices until they increase sales and profits?
if marginal production costs exceed marginal revenues, the firm will suffer losses, not profits.
Advantages of wealth maximization?
Maximizing your wealth keeps you moving forward in life. With this type of strategy, you are always looking for better opportunities to make money.
What example does the author give to back up his statement that maximizing utility is not synonymous with acting selfishly?
The author provides the example of a parent sacrificing personal desires for the well-being of their child as a demonstration that maximizing utility does not always align with acting selfishly. This shows how individuals can prioritize the overall happiness and welfare of others over their own self-interest.
What are opinions of the Barbara Adamson eDirect Online Profits Course?
Information about "Barbara Adamson eDirect online profits" is scarce to non-existent when a Google search is done for "Barbara Adamson eDirect online profits," "Barbara Adamson," or "eDirect online profits." That is a pretty good indication that one should be extremely cautious. Legitimate businesses operating online almost always have as widespread presence on the web as possible, For more information about eDirect Online Profits, click on the Related Question below.
Can disruptive innovation earn companies higher profits?
It can indeed. Disruptive innovation may not always be a good thing, but in rare cases it is.
Why would an accountant say a firm is making a profit and an economist say it is losing money?
Economists always include both implicit and explicit costs in the calculation of their profits while accountants only cater for explicit costs when calculating profits.So due to the inclusion of opportunity costs, which can be termed implicit costs, economists' profits will always be lower than accountants' profits.Hence an accountant may say they are making profits while it is different from an economist's view.
Do Foreign Auto Mfgr's pay fed taxes on profits made in USA?
Depending on specific agreements made between the US and the other country...almost always yes. Just like US Cos pay on profits made in other countries.
Will sales training increase the amount of profits?
It is a fair and accurate assumption that the more educated in a product one is, the more possibility of sales, thereby increasing profit. It is always the hope of whomever is conducting the sales training, that the training will pay off in higher profits.
How easy is it to do business in China?
It will most likely be difficult to do business in China as the Chinese system can be very different to western system for conducting business. The government are a lot more involved in controlling their own economy and maximizing profits. Like everything else, research will always be crucial when entering into a new business venture. Researching things like "how big is the market for said business" or "how competitive is the market?" before diving in may prevent a business from failing like many others before.
