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  2.  
  3. PEARSON (PEARSON)
  4.  
  5. Economics A
  6.  
  7. Unit 3 - Business behaviour and the labour market

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A* summary on business objective

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  • Course
  • Unit 3 - Business behaviour and the labour market
  • Institution
  • PEARSON (PEARSON)
  • Book
  • Edexcel AS/A level Eco 6th edition Student Book

EXAM IS COMING!!!!! This is everything you need for this topic! I got A* studying this, soooooo it will probably reduce your time and effort to find a tutor and it will be more beneficial than your class notes!!! Check out for other summaries in my uploads.

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  • Yes
  • January 20, 2023
  • 2
  • 2022/2023
  • Summary

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  • business objective

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  • Unit 3 - Business behaviour and the labour market
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3.2 Business objectives
3.2.1 Business objectives
a) Types of business objectives
 profit maximization (MC=MR)
 revenue maximization (MR=0)
 sales maximization (AC=AR) / (TR=TC)
 satisficing (making just enough profit)
 CSR




1) Profit maximization (MC=MR)
SR profit max VS LR profit max
=if invest in capital SR will increase costs and profit but LR quality might
improve
(PLC divorce of ownership)
***The divorce of ownership and control/principal agent problem***
Owners/shareholders will want business to max profit & dividends
VS
Directors/managers may want to max revenue, sales or bonus
(maybe becoz they are in charge of the day to day operation in the business)


1) Revenue maximization (MR=0)
AKA market share
Larger sales revenue  could have higher pay to managers
Increases size of the firm
E.g. Amazon


2) Sales maximization (AC=AR) / (TR=TC)
AKA market share

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