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Business Studies

Multiple Objectives of Business

This passage ...

Question

This passage highlights that the theory of profit maximization and profit motive:

A

Is largely responsible for the worst mistakes in public policy.

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B

Is a synchronized goal with a company’s ability to make a social contribution.

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C

Is the main purpose and job of managing a business.

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D

Was an idea not invented by classical economists.

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Solution

The correct option is A Is largely responsible for the worst mistakes in public policy.
Profit maximizing is like a disease and this deep seated hostility is responsible for the worst mistakes of public policy.

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Business is essentially a social institution and not merely a profit-making activity.

'Business is essentially a social institution and not merely a profit making activity'. Explain.

Q. In a reputed Co., for the last few days, differences have cropped up between management and workers. The workers were demanding more bonus. This matter hai aggravated so much that the attention of both the parties has been diverted from production to division of profit. Consequently, the profits of the company began to fall down. In order to assess the situation of company's rapidly falling profits, a team of specialists was invited. After investigation, besides the differences, one more fact was revealed. That fact was the Purchase Manager of the company was purchasing raw material from the company run by his own brother at a price more than market price. So, with the increase in cost, profit was reduced.
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