Why is profit maximization the main objective of a firm?
1 Answer
Jul 17, 2015
Not all economists agree that the main objective of a firm is profit maximization.
Explanation:
Some economists think that firms may have other objectives as well. For instance, managerial theories of the firm think that managers may have a different objective, such as the growth rate of the firm or the value of the firm on the stock market. Also, according to the Corporate Social Responsibility argument, firms may also have social objectives, which are more compatible with a satisfactory profit rather than a maximum profit.
