Which of the Following Is a Valid Criticism Concerning the Goal

question 80

Multiple Choice

Which of the following is a valid criticism concerning the goal of firms to maximize profits?

• A) profit maximization ignores expenses
• B) profit maximization is completely unrelated to shareholder wealth
• C) profit maximization may ignore the timing of those profits
• D) there are no valid criticisms of profit maximizing firms

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales activity, such as rent or salaries.

Cost-Volume-Profit Graph

A visual representation that shows the relationship between a company's costs, sales volume, and profits, helping in decision-making and planning.

Fixed and Variable

Costs or expenses that a company may incur, with fixed costs being constant regardless of activities, and variable costs fluctuating with business activity levels.

Separation Methods

Techniques used in chemistry and manufacturing to divide components of mixtures into individual constituents, such as distillation and filtration.