Final answer:
According to agency theory and the principles of a competitive market, for a corporation aiming for the highest long-run profitability, a moderate revenue growth rate relative to the industry is most likely to be optimal. Excessive or very low growth rates can lead to unsustainable competition or underperformance. Therefore, profitability is enhanced when revenue growth is managed alongside cost control and strategic pricing.
Step-by-step explanation:
Agency theory in business suggests that management should act in the best interest of shareholders, which often means driving long-term profitability. According to the tenets of economic and business theory, a corporation's revenue growth rate will play a significant role in its long-term profitability. In the context of oligopolies and perfectly competitive markets, the dynamics of revenue growth, cost management, and pricing strategies are crucial to achieving profit maximization.
Marginal revenue plays a central role in determining the optimal level of output for a firm. A perfectly competitive firm will increase output as long as the marginal revenue, which is the price for a perfectly competitive firm, is above the marginal cost. The goal is to maximize profits where marginal revenue equals marginal cost. If a firm sets a price too low, it's possible that total costs could exceed total revenues, which would result in losses. Hence, the firm aims for a price that maximizes the difference between revenues and costs.
In light of the question, the optimal scenario for a corporation in terms of long-run profitability would be having a revenue growth rate that is moderate relative to the industry. This moderate growth suggests that the firm is competitive yet not engaged in potentially unsustainable or 'cutthroat competition' that could lead to zero economic profits as firms continue to cut prices to capture or maintain market share.