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In profit maximization, the ultimate aim of the business is profit. When profit is the main target, focus on other factors like investment, expansion, usage of the product, creating goodwill, ethics, etc., are lost or given minimum priority.
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I think what your asking it what economic system is in place in a country where firms maximise profit. The answer is Capitalism. Under Capitalism, such as we observe in the western world (UK, USA etc) each firm produces a product or service in order to make profit. The firm then allocates this profit amongst shareholders or individual owners as it sees fit. Under Communism, which was observed in Eastern Europe and the USSR, each firm produced a good or service which is allocated by the state.
1. Profit Maximisation is the main objective of a firm" Discuss this statement with the help of an example.
their main goal of course is to gain more profit for the target market.
Value maximization and profit maximization are very much related, the main difference being- value maximization means increases in owners' wealth achieved by maximizing of the value of a firm's common stock. profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. the other difference among the two could be sited as- value maximization is seen as long term objective of a firm, whereas profit maximization is generally a short term objective.
The main and primary goal of the business no matter what kind of nature it has, is only profit maximization. There may also be some secondary purposes such as well being of people or offering services to the society but the primary focus is PROFIT. http://www.aidandtrade.com/
In profit maximization, the ultimate aim of the business is profit. When profit is the main target, focus on other factors like investment, expansion, usage of the product, creating goodwill, ethics, etc., are lost or given minimum priority.
The advantages of profit maximization is that creates a cash flow and investors become interested in companies that are maximizing their profits. The main disadvantage of it is that there are risks for business owners involved.An advantage of profit maximization is that it could create a huge increase in cash flow as long as the market remains good. However, a disadvantage is that if the market collapses during a period of profit maximization the business could lose everything.
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I think what your asking it what economic system is in place in a country where firms maximise profit. The answer is Capitalism. Under Capitalism, such as we observe in the western world (UK, USA etc) each firm produces a product or service in order to make profit. The firm then allocates this profit amongst shareholders or individual owners as it sees fit. Under Communism, which was observed in Eastern Europe and the USSR, each firm produced a good or service which is allocated by the state.
1. Profit Maximisation is the main objective of a firm" Discuss this statement with the help of an example.
Profit maximization is also about increasing the EPS (earning per share) of the shareholders and to maximise the net present worth. Main objective of co is profit maximization EPS: net profit/ no of shares outstanding. Wealth maximization is anything having value. Anything which can be expressed in money value or economic value which is considered as wealth. Baisc objective of a co is wealth maximization. How to increase the wealth: By producing a quality product at a competitive rate. By giving product at reasonable price. Good after sales service. this all things leads to increase in co's wealth.
Criticism of Baumol's sales maximization model includes the assumption of profit maximization as the main goal of firms, the lack of consideration for other objectives like shareholder wealth maximization, and the oversimplification of managerial behavior by focusing solely on sales revenue. Additionally, critics argue that the model does not account for dynamic market conditions and competitive strategies that firms may adopt.
To profit from the sugar trade
To profit from the sugar trade
their main goal of course is to gain more profit for the target market.