Question

It is assumed in economic theory that _______________.

• A. decision making within the firm is usually undertaken by managers, but never by the owners.
• B. the ultimate goal of the firm is to maximise profits, regardless of firm size or type of business organisation.
• C. as the firm's size increases, so do its goals.
• D. the basic decision making unit of any firm is its owners.

Answer 1

Answer: (B)

the ultimate goal of the firm is to maximise profits, regardless of firm size or type of business organisation.

The profit margin of every firm in the world is not equal. The profits earned by various firms depends on the size of the firm as well as the type of business which the firm is carrying but the quintessential target of every firm is to attain profit maximisation so is to grow and expand the business.