Question

my another topic is all about managerial economics: Objectives of the Firm. can you please explain to me in simplest way and also give an example for each title:

1. Profit maximization model 2. economist theory of the firm 3. Cyert and March's Behavior Theory

much appreciated if you can give me an example of it. thank you so much.

Answer 1

Main Objective of the Firm

Objective of the Firm may be described in different terms. The important terms are given below

1. Profit Maximisation

2.Increase in total turnover

3. Maximum Growth & Increase in the share of Market

1. Profit Maximaisation: Measure the profiablity of the firm describes in following ways

A) To provide high rated divident to the share holders

B) Profitization will be utalised for the reserch and development of the firm

C) To increase the increment in salary to the labors

D) Increase in the Percentage of market shares

Examples of Profit Maximisation is Reducing the cost of goods sold, reducing the fixed costs, and reducing the total paybale of taxes.

2) Increasing the turnover :  Measure to maximise the turnover describes below:

A) High rated turnover in the market shares will increase the chances for create monompolist in the product in the market.

B) Employees always work with large capacity firms for they want secure their life with maximum payouts. Turnover will be decided one factor the firm whether Big concern or Small concern.

C) Increase in the total turn over would eliminate the competititon in the Market.

Exmples is increae in the total productivity of the firm, Increase the market share, Reduce competition of the prodcut.

3) maximum Growth & increase in the share of market: This will leads to the maximum shates in market to improve the profitabilit and the total turnover. This will also help in the decision making in the price fixation in the market.

Economic theory of firm defined as caring about determination of the product that should be sell  increase in total productivity or out of the firm, distribution of product according to demad and supply theory.

Cyert and March's Behavior Theory

According to this theory to decide the process of the structue of demand and supply of the firm in different group. Well versed management system to help the firm to decision making process. Consider to help in the necessities of the firm with good cooperation among the management level to to solve the issues in relatd to this. To take decision making capacity of the management level to improve the performance of the firm. To improve the total working atmosphere of the firm.