Profit maximization

Chapter 6 explores the firm behaviour while operating in situations of horizontal demand, which implies a perfect competition scenario. The assumptions made clear while evaluating the perfect market assumption was that all the players in the market were privy to equal information and production resources, which is largely not the case in the real world. In my opinion, the implications of the assumptions influenced the perception of many students towards the content of the chapter. However, the…

people if the sale went through. The issue here is should Nash mention the toxic wastes to the Fledgling representative before he closed the sale? To solve this issue, Nash can refer to Deckop’s decision-making models, which are utilitarianism, profit maximization, and universalism. Utilitarianism can be understood by the common phrases “The greatest good for the greatest number” and “The ends justify the means.” From utilitarianism perspective, we need to analyse who benefits and who is…

sufficient to cover all costs, including a return to the capital providers.” That is only part of what a business is, you must also think about the different variations of businesses, some are for profit maximization and others are alternative…

Corporation, which was formed in 1929. Their mission statement is as follows: “Create value for shareholders through the energy business”. In 2006, Kerr-Mcgee was acquired by Anadarko Petroleum, a company which was concern not only about building profit but also the interest of society. This $14 billion oil and gas exploration company’s mission provides a glimpse into the reason, perhaps that’s why they could manage to purchased Kerr-McGee. The mission statement of Anadarko Petroleum was; “To…

constitute the theoretical and practical aspect of CSR (Choi, 2009). The theories underpinning CSR studies express how CSR is observed or interpreted by different stakeholders from different perspectives. For example, classical theory deals with profit maximisation from a shareholders perspective or priority (Friedman, 2002). Agency theory emphasizes on getting the legal recognition to act on behalf of the principal from managers (agents) perspective (Salazar & Husted,…

companies that involve in anything other than profit maximization are distorting the resource allocation and sabotaging the mechanisms of the market. This makes it contrary to the fundamental functions of a business to involve itself in social matters since a business is an economic entity rather than a social one and its responsibility is to adhere to the law. Therefore, a company would be engaging in an irresponsible venture if it does not seek to maximize profits. Moreover, it is argued that…

One of the fundamental capabilities of humans that have been exploited especially in the business world is their ability to make choice, in most cases, rational ones. Human beings are endowed with the capability to make prudent choices and decisions which the view of maximizing their experience or satisfaction. At individual level, any decision arrived is meant to the highest self-interest and bring the greatest satisfaction to the decision maker. This subjective view of the reasons why…

economic theory normal profit is referred as the minimum level of profit necessary for a firm survival in that line of business. This level of profit enables the firm to incur all its running cost of business. However Accountant calculation is rather different because calculation of profit is based on numerical of past monetary costs and revenues and makes no reference to the concept of opportunity cost. Normal profit arise where Average revenue = Average total cost. Normal profit occurs…

Therefore, profit may be lower than the one favored by the owners, the cost may be higher, and the value of the company is lower than the…

doctors that serve class interest by placing profit maximization above access to optimal health care. A Marxist perspective draws on the impact of working and living conditions in a capitalist society that is comprised of two classes: the bourgeoisie, and the proletariat working class. The working and living conditions play a huge factor which contribute to illness and the role of medical profession. He highlights how the main goal in the industry is profit, without taking into consider the…