Economics 9708 · AS & A Level · 7.8

7.8 — practice question

Under what circumstances are a firm’s objectives most likely to be different from profit maximisation?

  • Awhen a firm finances new investment largely by retained profits
  • Bwhere firms are companies with very active shareholders
  • Cwhere investment banks make takeovers easy to implement
  • Dwhere there are a large number of individual shareholders in a firm run by employed managers

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