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© Dlwlrma A   /  2019-1-9 20:11  /   0 人收藏 版权:保留作者信息

In the economic theory, it assumed that the interests of owners or shareholders are the most
important so that firms will seek to maximize their profits. The profit is equal to the total
revenue minus the total cost.To be maximized, the gap between the total revenue and the
total cost is the largest or producing the output the marginal revenue is equal to the marginal
cost. The graph below shows how the firms produce at the maximum profit level output
The output at Q1 is the profit maximizing output level. A firm produce below Q1, is sacrificing
the potential profit. It can increase profit by producing more. The same idea of the output
above Q1, is making a lost on each successive unit. It would be better off cutting the output at Q1
图片 1.png

However, in reality, most of the firms are unable to maximize the profit during the production
process. First, it is hard to identify the output level because the cost is always changing so that
many firms are likely to set the selling price byusing thetotal average cost plus the profit
margin that they would like to earn. Besides, the profit maximization is a short run concept,
and it may be a conflict with the long-term interest in the company. If a firm has a large
abnormal profit, it may attract new entrants into the market. The market will be more
contestable and lead to less profit can be earned by the company when more firms join in.
What’s more,this objective will damage the relationship between the stakeholder and the frim,
such as its consumers and the company workforce as they may see senior managers and
shareholders earning large returns.
In reality, different firms have different objective and situations. There is a separation of the
ownership and control in many firms.The shareholders are not interested in the firms maximize
the profit or not. They only focus on how many market dividends they can get.Therefore, many
firms are likely to choose to produce at the satisficing profit level. Apart from this, if the firm
wants to increase the market share, they will produce at therevenue maximized output level.
To sum up, the firm may able to maximize profits, but the objectives are different for each
company. It depends on the relationship between the stakeholder and frim, the market
structure of companies, and the situation in the market.
alternative objectives
+according to manegerial theory

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ViCCC A 2019-1-9 20:12:43
谢谢lse学长的分享!!!!!!!
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Dlwlrma A 2019-1-9 20:13:19
ViCCC 发表于 2019-1-9 20:12
谢谢lse学长的分享!!!!!!!

謝謝ic學弟的支持
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ViCCC A 2019-1-9 20:13:50
Dlwlrma 发表于 2019-1-9 20:13
謝謝ic學弟的支持

不客气 有空来曼大看我 带我去伦敦逛逛
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