Question

The firm can be viewed as a series of contractual relationships that connect many stakeholders …..
1- Show the Society’s roll in such relationship , illustrate your answer with one example from Palestinian environment .
2- One of the main Limitations of the Theory of the Firm , Is that “ Seeking satisfactory rather than optimal
results”….explain this limitation , illustrate your answers with a real case .
3- 'In the long run, a profit-maximizing firm would never knowingly market unsafe products. However, in the short
run, unsafe

Answer 1

Answer :

The firm can be viewed as a series of contractual relationships that connect many stakeholders …..
1): Show the Society’s roll in such relationship , illustrate your answer with one example from Palestinian environment .

For this situation, the form can be seen as a progression of contractual relationships that interface numerous stakeholders so here the general public is a job in such a relationship is demonstrated as follows.

The arrangement of contractual relationships fundamentally implies the advantage of one variable is identified with the advantage of another.

Each individual in an organization is connected with certain components which are based on different factors which are straightforwardly or by implication joined with some contractual relationships.

Social factors working in the environment and different opportunities can lead the individual towards the accomplishment of a specific objective.

Contractual relationships are not generally founded on some profit thought process or some cash factors that are connected with this sort of relationships; their contractual relationships might be profit-based or willful therefore it is hard to clarify the contractual existence of numerous stakeholders.

Palestinian environment is a blend of complex environment where everything isn't simple in view of some political and border issues which may hurt the social life of the individuals.

Therefore the best model in the Palestinian environment days to cover the circumstance according to the existence of various factors which can give positive and negative externalities in the economy.

2- One of the main Limitations of the Theory of the Firm , Is that “ Seeking satisfactory rather than optimal
results”….explain this limitation , illustrate your answers with a real case .

The fundamental limitations of the theory of the firm that looking for satisfactory as opposed to optimal outcomes this restriction implies as opposed to going for the best outcome in the wake of using optimum use of the assets it is simply to think about a satisfactory outcome from a specific project or a procedure.

Optimal reserves mean the best outcomes inside the accessible assets.

This impediment of the theory of the firm can relate with the genuine plan of action of Elon Musk space X crucial is satisfactory however not founded on the optimal outcome.

Since it is a program that is a psychological fulfillment for Elon Musk however it isn't for all intents and purposes actualized in a circumstance of the genuine theory of acknowledgment from the side of individuals.

So fundamentally in the organization, it is important to work according to the optimal usage of assets as opposed to accomplishing work only for fulfillment, now and again it will decrease the income of the firm.

3- 'In the long run, a profit-maximizing firm would never knowingly market unsafe products. However, in the short run, unsafe

The marketing of perilous products is unmistakably conflicting with long-run profit expansion. For instance, no pharmaceutical manufacturer would intentionally advertise drugs with negative reactions a lot more prominent than expected advantages. Unfortunately, undercapitalized or "hit and run" manufacturers can incur a great deal of harm in the short run before the negative symptoms of drugs and different products are completely figured it out. At the point when the quantity and quality of consumer information is constrained, slip-ups can and do happen. From this point of view, government or industry guideline of product wellbeing can possibly decrease the social costs that outcome from perilous products.

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