jojo1995
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what are the aims of revenue and sales maximization?

I think they both aim to increase market share but im not sure why a firm would chose one over the other, help pls ?
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rasclerhys
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Sales maximisation aims to increase market share.
Revenue maximisation may occur to increase cash-flow or to allow for further investment.

There are many reasons why a firm would choose to do one over another, in a contestable market firms may sales maximise in order to prevent hit and run tactics or reduce the threat of new entry. In certain situations revenue maximisation may incur a loss whereas sales maximisation may not.
Sales maximisation results in the maximum amount of output being sold, this may mean the company becomes well known and may improve the brand (this may result in the demand curve becoming more inelastic). Also the CEO may become more well-known if he works at a company which is sales maximisation. This may drive CEOs to sales maximise as the more well-known they are the more likely they will be offered a better/higher paid job.
Shareholders of the firm may tell the firm to revenue/sales maximise.

Hope this helps,

Rhys
www.learneconomicsonline.com
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jojo1995
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(Original post by rasclerhys)
Sales maximisation aims to increase market share.
Revenue maximisation may occur to increase cash-flow or to allow for further investment.

There are many reasons why a firm would choose to do one over another, in a contestable market firms may sales maximise in order to prevent hit and run tactics or reduce the threat of new entry. In certain situations revenue maximisation may incur a loss whereas sales maximisation may not.
Sales maximisation results in the maximum amount of output being sold, this may mean the company becomes well known and may improve the brand (this may result in the demand curve becoming more inelastic). Also the CEO may become more well-known if he works at a company which is sales maximisation. This may drive CEOs to sales maximise as the more well-known they are the more likely they will be offered a better/higher paid job.
Shareholders of the firm may tell the firm to revenue/sales maximise.

Hope this helps,

Rhys
www.learneconomicsonline.com
thank you so much Rhys, this is absolutely brilliant
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A Cat
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Pretty much every aim of the standard business - tesco, ikea, spar, starbucks whatever - is to make and increase profit. How it is done I guess is what you'll be revising.
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