Selecting Profit Maximization as the Primary Goal of the Firm

question 61

Essay

Selecting profit maximization as the primary goal of the firm may not increase its value,because a profit-only focus has several drawbacks.List and describe these drawbacks.

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Definitions:

Permanent Storage

The long-term preservation of information or data in a manner that ensures its future retrieval and use.

Cortex

The outer layer of the cerebrum in the brain, involved in complex brain functions such as thought, memory, and consciousness.

Metabolic Rate

This rate measures the amount of energy expended by the body over a certain period of time, including during various activities beyond resting conditions.

Limbic Brain

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It regulates basic emotions (such as fear and pleasure) and drives (such as those for food and sex).