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WHAT IS THE PROFIT MAXIMISATION?
If the company is public listed (trades in the stock market) their aim is shareholder wealth maximization whereas for a privately owned firm a profit maximization objective is appropriate.
it is operating cost
Both profit maximization and wealth maximization have the objective of increasing the net worth.
Resources is a factor in profit maximization. A company has to have all of their necessary resources in place to ensure they can maximize their profits each day.
Under what conditions might profit maximization not lead to stock price maximization?"
Not necessarily
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Profit maximization increase the graph of outputs.
Profit maximization can be both good or bad. Done correctly, profit maximization helps the company provide great products and services for customers.
sales maximization technique is generally used in scale industries where base of the expenses is largelly fixed and where variable costs are limited. on the other hand profit maximization technique are used by variety of industries. total output is higher in sales maximization as compared to profit maximization
Violation of profit maximization Dilution pf economic productivity Cost to others Too much power arise by business Lack of skill by business leaders to solve social issue
The arguments in favor of wealth maximization as the objective of a firm are that it aligns the interests of shareholders and management, promotes long-term sustainability, and encourages efficient allocation of resources. Profit maximization, on the other hand, may lead to short-term thinking, unethical practices, and neglect of other stakeholders' interests. By focusing on wealth maximization, firms can generate sustained value for shareholders and society as a whole.
discount rate
Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization
WHAT IS THE PROFIT MAXIMISATION?
differentiate between value for money and profit maximization