TU MBS First Sem Managerial Economics

Value Maximization Model

Introduction Value maximization theory was developed as an alternative to the profit maximization theory due to weaknesses or limitations of profit maximization theory. This theory is also known as wealth maximization theory. According to this theory, value or wealth maximization is the long-run objective of the firm that guides resource allocation decisions of the firm …

Value Maximization Model Read More »

Sales Revenue Maximization Model/Baumol’s Model to Theory of the Firm

Introduction William J. Baumol confronted the assumption of profit maximization and argued that maximization of sales rather than profit is the ultimate objective of the firm. So, a firm should direct its energies on promoting and maximizing sales. He, therefore, called his hypothesis as Sales Revenue Maximization hypothesis.  The sales maximization model is thus an alternative …

Sales Revenue Maximization Model/Baumol’s Model to Theory of the Firm Read More »

Don`t copy text!