A. firms do not know how to maximize profits.
B. firms have other aims
C. it does not explain monopolistic competition
D. Both the first and second option
Alternative Theories Of The Firm
Public limited companies may not maximize their profits because ?
A. they are afraid of encouraging takeovers.
B. shareholders have little control over managers.
C. shareholders want higher dividends.
D. both the first and third option.
The divorce of ownership and control tends to occur in ?
A. sole proprietors
B. partnerships
C. public limited companies
D. monopolies
A firm may be unable to maximize profits because it ?
A. does not know its MC and MR
B. has too much information
C. has too little information
D. The first and third option
Williamson suggests that managers might NOT try to achieve ?
A. respect of other managers.
B. maximum profits.
C. job security
D. a large number of subordinates
The divorce of owner ship and control causes a problem usually referred to by economists as ?
A. profit myopia
B. principal-agent problem.
C. merger mania.
D. moral hazard
A sale maximizing firm will produce where ?
A. AR minus AC is maximized
B. MC = MR
C. quantity sold is maximized
D. sales revenue is maximized
Growth maximization is the same as ?
A. sales revenue maximization
B. maximization the growth of sales revenue.
C. Sales maximization
D. long-run profit maximization.
The merger of a clothing firm and a software producer would be a ……. merger?
A. horizontal
B. vertical
C. conglomerate
D. homogeneous
Fear to take-overs will lead firms to maximize ?
A. growth.
B. sales revenue
C. managers utility
D. profits.