Profit maximisation has been one of the main aims of the firms. The generally accepted weigh is the long run bequeath wish to maximize profit. peripheral Cost and Marginal Revenue fuck be use to find the profit maximising level of output. Marginal live is the addition to total comprise of one extra social unit of output. Marginal tax revenue is the increase in total revenue resulting from an extra unit of sales. Economic theory predicts that profits will be maximised at the output level where marginal cost equals maginal revenue (MC=MR). This is the point where firms will decide to produce.
The take of firms is apparent to lie with one or more of the firms stakeholders. It might expect obvious to state that it is the owners or shareholders of a company who control it. This is perhaps true for small businesses where the owner is overly the film director or manager of the business. The owner of a small local corner shop, for instance, who also runs the shop will make the decisions around the business. However, it is less obvious that owners control the business they own when there is a very large number of shareholders.
Apart from the shareholders, the are also other stakeholders in business. Shareholders in a public expressage company elect directors to look after their interests.
Directors in crouch appoint managers who are responsible for the day to day tally of the business. Therefore there may be a dissever between ownership and control. The only way in which owners can influence decision making directly is by pink slip directors at the Annual General Meeting of the company. In utilize the company needs to be going bankrupt to wake sufficient shareholders for this to happen. Shareholders can also sell their shares, forcing the share expenditure down and making...
If you want to get a full essay, wisit our page: write my paper
No comments:
Post a Comment