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If it is a privately owned organization then the primary goal is to maximize Revenue and Profit.
If it is a public limited company that has numerous shareholders, then the primary goal is to maximize Shareholder wealth.
Wiki User
∙ 14y ago
Wiki User
∙ 11y agoSome firms want to get maxim profit because they are greedy. Other firms may accept less than maximum profit due to balancing profit against other values such as: concern for their employees, desire to follow the law, making ethical and moral choices, having minimal impact on the environment, and wanting to avoid hurting others. Pure profit maximization is pure greed.
Wiki User
∙ 13y agoPresuming the firm is acting rationally maximising profits equates to maximising shareholder/stakeholder value. Maximising production is not always congruent with maximising profits especially where a) you are left with huge unsold inventories) or b) the marginal cost of production exceeds the marginal revenue from sales
Wiki User
∙ 12y agoif you have a lot of revenue but have a high cost, there is no point to have high revenue bcz your profit is not going to be more.
paulbenn
Capitalism is about making a profit. There’s no point in producing lots more widgets if they cannot be sold profitably.
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In a market economy what is the purpose of all firms?
Maximize profit
What is sales maximization model?
Term sales maximization Definition: The notion that business firms (especially those operating in the real world) are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business.
Is it true or false that the objective of a firm is to maximize total revenue?
Generally speaking, the main objective of a firm is profit maximisation. This is not always the case, however, as some firms have different goals, including providing charitable services, satisficing, and providing a high quality good or service.Revenue (income) increases profit, while expenses decrease profit. Therefore, if a firm's revenue increases more than their expenses increase, they will generate a greater profit.
Why is the equality of marginal revenue to marginal cost essential to profit maximuzation in all of the market structures?
When Marginal Cost is below Marginal Revenue, profit is increasing. When Marginal Cost is above Marginal Revenue, profit is decreasing. Since the goal of firms is to maximise profit, they should produce at a level where the MR of producing another unit is equal to the Marginal Cost of producing another unit. Firms should keep producing until this point because there is a hidden profit in MC. This is because we are not taking into account the Accounting profit.
If there are no profits in competitive equilibrium why do firms produce how can they stay in business?
why do firm stay in business if profit is=0In economic profit is revenue minus all costs,including implicit costs,like the opportunity cost of the owner's time and money.In the zero profit equilibrium,firms earn enough revenue to cover these costs.by Abdul hanan tareen
In a market economy what is the purpose of all firms?
Maximize profit
When a firms revenue from sales exceeds its cost of production it will earn?
Profit
What do development firms do?
Development firms speculate on an amount of land to purchase--based on salability--and develop accordingly, in order to maximize profit
What is sales maximization model?
Term sales maximization Definition: The notion that business firms (especially those operating in the real world) are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business.
Is it true or false that the objective of a firm is to maximize total revenue?
Generally speaking, the main objective of a firm is profit maximisation. This is not always the case, however, as some firms have different goals, including providing charitable services, satisficing, and providing a high quality good or service.Revenue (income) increases profit, while expenses decrease profit. Therefore, if a firm's revenue increases more than their expenses increase, they will generate a greater profit.
Why is the equality of marginal revenue to marginal cost essential to profit maximuzation in all of the market structures?
When Marginal Cost is below Marginal Revenue, profit is increasing. When Marginal Cost is above Marginal Revenue, profit is decreasing. Since the goal of firms is to maximise profit, they should produce at a level where the MR of producing another unit is equal to the Marginal Cost of producing another unit. Firms should keep producing until this point because there is a hidden profit in MC. This is because we are not taking into account the Accounting profit.
If there are no profits in competitive equilibrium why do firms produce how can they stay in business?
why do firm stay in business if profit is=0In economic profit is revenue minus all costs,including implicit costs,like the opportunity cost of the owner's time and money.In the zero profit equilibrium,firms earn enough revenue to cover these costs.by Abdul hanan tareen
What is profit maximazation?
Profit Maximization is an interesting and rather deep issue in Economics. Please understand that this question can be answered from various approach and interpretation. There are other disciplines like Business and Management which offers a slightly different answer.For example, if you are a Finance student, you might use the term to maximize shareholder value. ( which can be different from this goal ). From my understanding, profit maximization alone cannot be an appropriate goal for a firm. When I teach my students, I often ask them, if each of you start a company today, will the reason to do so, just to maximize profit ?. Although many firms do aim to maximize profit in their existence, not all do so. When we say maximize profit, this means to get the most profit in the firm's existence. And there are other firms that don't. Other goals of the firm can be expansion or growth, where they focus on establishing more branches or growing larger, while other firms focus on sales maximization, where they focus on selling more. There are also other firms that put the environment or social issues as their goal. ( although this can be argued if it's a marketing ploy ). Apart from these different goals of firms, we need to understand that different firms have different goals. A small grocery shop will have a different goal than a multinational company. And a different environment can also affect the goals of the company. If the firms operates in a monopolistic environment, then profit maximization is possible, as it's the only firm. If the firm operates in a perfectly competitive environment, the goal of profit maximization is not possible, as profit can be influenced by new firms who enter the environment and old firms who exit it.
Why firms do not always try to maximize profit?
Sometimes the managers of the firm may be more interested in their own gain, for example if the firm will maximise profits at 1000 units, anything produced after that has a higher Marginal cost than it does Marginal Revenue, profit wil start to decline. however managers may still aim to sell more than the 1000 if they are receiving a bonus for the amount of sales, they may choose to maximise sales rather than profits
A perfectly competative firms marginal cost exceeds its marginal revenue at its current output To increase its profit the firm will?
To increase profit the firm will decrease output to a point where MC=MR. This is the Profit Maximisation point
What is the consulting firms revenue in Portugal?
5000dollor revenue in portugal
When margine revenue equals margine cost?
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
