The Idea That Firms Pursue Actions to Maximize Profits Is

question 17

Multiple Choice

The idea that firms pursue actions to maximize profits is:

• A) generally rejected by economists in favor of the idea that firms maximize revenues.
• B) a reasonable assumption, because firms that do not maximize profits will see their market share drain away to their profit-maximizing rivals.
• C) easier to accomplish when management has little oversight from shareholders and boards of directors.
• D) refuted by evidence that firms engage in goodwill advertising and other charitable activities.

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Definitions:

Nondiscriminatory Reason

A justification for a particular decision or action that is not based on prejudice or bias related to race, color, religion, sex, or national origin.

Undue Hardship

An action requiring significant difficulty or expense by an employer to accommodate an employee's disability or religious practices.

Americans with Disabilities Act

A U.S. law enacted in 1990 that prohibits discrimination against individuals with disabilities in all areas of public life.

Physical Disability

A term that refers to a long-term or permanent impairment that significantly limits one or more major life activities.