3.2 Business Objectives

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Where does profit maximisation occur?
MC = MR
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What are the arguments for profit maximisation?
Neo-classical economics says that interests of owners are most importnant To generate funds for investment and growth To give more security in case of economic downturn
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Where does revenue maximisation occur?
MR = 0
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What are the arguments for revenue maximisation?
Agents are interested in maximising revenue as salary depends on revenue Increases a firm's prestige
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Where does sales maximisation occur?
AC = AR
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What are the arguments for sales maximisation?
Increased market share Output increases, so firm is organically growing
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What is profit satisficing?
Earning enough profit to keep owners happy while following other objectives
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What are the arguments for profit maximisation?

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Neo-classical economics says that interests of owners are most importnant To generate funds for investment and growth To give more security in case of economic downturn

Card 3

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Where does revenue maximisation occur?

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Card 4

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What are the arguments for revenue maximisation?

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Card 5

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Where does sales maximisation occur?

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