Public limited companies may not maximize their profits because ?
Correct answer: B. shareholders have little control over managers.
- A. they are afraid of encouraging takeovers.
- B. shareholders have little control over managers.
- C. shareholders want higher dividends.
- D. both the first and third option.
Explanation
Managers of public companies may pursue growth, security, or personal objectives because dispersed shareholders cannot closely control them. This separation of ownership and management can weaken strict profit maximization.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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