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The goal of the firm should be

A) maximization of profits.
B)maximization ofshareholder wealth.
C) maximization of consumer satisfaction.
D) maximization of sales.

1 Answer

5 votes

Final answer:

The goal of the firm should be B) maximization of shareholder wealth.

Step-by-step explanation:

Maximizing shareholder wealth means that the firm is focused on increasing the value of the company for its shareholders. This includes generating profits, increasing the stock price, and paying dividends to shareholders. By pursuing this goal, the firm aims to attract and retain investors, which in turn can lead to growth and sustainability.

For example, if a firm focuses on maximizing sales (option D), it may achieve high revenue, but if those sales come at a high cost and do not generate enough profit, it may not be sustainable in the long run.

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