How Could the Assumption of Profit Maximization Be Justified

question 20

Multiple Choice

How could the assumption of profit maximization be justified?

• A)The managers of a commercial firm who do not seek profit maximisation are more likely to lose their jobs, so only profit maximisers will survive.
• B)Business scandals such as those that took place at Enron and Ahold prove the wrongness of this assumption; therefore nobody should try to justify it
• C)It cannot be justified and is only an easy and common way to overcoming the difficulty to define the ultimate goal of the firm
• D)It does not need to be justified because it is a basic assumption of business.