Some Top Managers Seek Only Enough Profits to Convince Stockholders

question 2

Multiple Choice

Some top managers seek only enough profits to convince stockholders that they are "doing a good job." The pricing objective of such managers is:

• A) satisfactory profits.
• B) status quo.
• C) nonprice competition.
• D) profit maximization.
• E) meeting competition.

---

Definitions:

Monopolistically Competitive

In a monopolistically competitive market, firms sell products that are not perfect substitutes for each other, leading to some degree of market power but with free entry and exit in the long run.

Positive Profit

A financial gain that occurs when the revenues from business activities exceed the expenses, costs, and taxes needed to sustain the operation.

Tangent

A straight line that touches a curve at a single point without crossing it at that point.

Long-run Equilibrium

A state in a market where all firms are making normal profits, with no incentives for entry or exit, and all factors of production are variable.