The economic theory of the firm assumes that the principle objective of a firm is to maximize profits. However, there are other goals that a firm may pursue such as maximizing return on investment, maximizing price of company's stock, maximizing market share. These different objectives may lend to different managerial decision making, given the same limited resources.
Are these other objectives necessarily inconsistent with the neoclassical objective of the firm?© BrainMass Inc. brainmass.com October 10, 2019, 5:24 am ad1c9bdddf
These objectives are not inconsistent with the neoclassical objective of the firm to maximize profits because all these goals or objectives directly or indirectly help the firm in achieving higher profits in the longer run.
For example, the objectives related to maximizing ROI or price of company's stock help the company in maximizing ...