Profit maximisation has been one of the main aims of the firms. The generally accepted view is the long run will wish to maximize profit. Marginal Cost and Marginal Revenue can be used to find the profit maximising level of output. Marginal cost is the addition to total cost of one extra unit of output. Marginal revenue is the increase in total revenue resulting from an extra unit of sales. Economic theory predicts that profits …
showed first 75 words of 1094 total

showed last 75 words of 1094 total
…especially sales revenue. This would please managers, who have a big interest in looking good. In Managerial and behavioural theory, the profit maximizing model is to do with trying to please the key stakeholders in a business, especially shareholders, but others too. And the behavioural theory theory argues that it is not just shareholders and managers who determine business behavior- you need to take into account government trade unions, pressure groups, etc.(e.g. greenpeace)