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profit maximization &wealth maximization of shareholders.
Problems involved with the use of profit maximization as the goal of the firm due to numbers of reasons. 1 It ignore the timing of return. 2 It ignores the timing of returns. 3 It ignores the risk.
To maximize profit by spreading business activities vis a vis adhering to corporate social responsibility.
C) What is the goal of the firm? Discuss how to measure achievement of this goal?
The most appropriate goal of a firm depends on the industry. In very general terms, a firm is a business with a goal of making money. Another major goal of a firm could be to help people or benevolence of some sort.
is this in relation to energy markets?
The goals are: 1) Profit Maximisation 2) Cost minimisation 3) Technological Advancement 4) Return on investment 5) Customer Satisfaction. Bas that's enough......
profit maximization &wealth maximization of shareholders.
A goal of firm isn't always profit driven, it can be any cause. Profit maximization is revenue driven, making more money is it focus.
Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization
Large number of sellers and buyers in the groupThe products of the sellers are differentiated, yet they are close substitutes of one another.There is free entry and exit of firms in the groupThe goal of the firm is profit maximisation, both in the short run and in the long runThe prices of factors and technology are given
Baumol suggested sales revenue maximisation as an alternative goal to profit maximisation. He presented two basic models: A static single–period model and a multi-period dynamic model of growth of sales revenue maximisation. Each model has two versions, one with advertising activities and another without.
Large number of sellers and buyers in the groupThe products of the sellers are differentiated, yet they are close substitutes of one another.There is free entry and exit of firms in the groupThe goal of the firm is profit maximisation, both in the short run and in the long runThe prices of factors and technology are given
Uncertainity and timing are some of the problems
Problems involved with the use of profit maximization as the goal of the firm due to numbers of reasons. 1 It ignore the timing of return. 2 It ignores the timing of returns. 3 It ignores the risk.
A goal a firm may have that is not to maximise profit or sales, but a goal to help the community for example fundrasing for a local charity. These goals could also be to help the enviroment.
A goal a firm may have that is not to maximise profit or sales, but a goal to help the community for example fundrasing for a local charity. These goals could also be to help the enviroment.