a) Objectives

a) different business objectives and reasons for them: profit maximisation, revenue maximisation, sales maximisation, satisficing

profit maximisation level of output → MC = MR

• MC = MR → no more profit can be extracted

• MC < MR → additional profit can be extracted

• MC > MR → firm is making a marginal loss

revenue maximisation → MR = 0

sales maximisation → AC = AR

• principal-agent problem

• to increase market share

• to increase output → economies of scale

• lower price → eliminate competition in the short-run

satisficing = profit works towards a desired standard of living