Discuss the goals of the firm and explain how firms can achieve internal and external economies of scale in production.

The objectives of the fast can be viewed as the motives of the entrepreneur/s who own and run the tight. There a number of goals that unfaltering can pursue in its day to day operations - it may filter out to maximize profits, sales or growth, clash plowholder expectations, or increasing market share. tap profits - do the biggest possible profit, or the smallest possible passage - is accepted as the main objective of most cockeyeds. service is the difference between the firms fare revenue (output sold figure by price) and its total cost of exertion. While it is generally recognised that profit maximisation is the main objective of most byplayes, we mustnt neglect the fact that firms may have different objectives. Another one and only(a) of those objectives could be to try and meet shareholder expectations. Company directors, who come to decision for a firm, try to do as outmatch they can to respond the interests of the shareholders. However, Shareholders ar e often interested in maximising mindless term returns on their investment and hence, it will sometimes pretend conflict between actions that maximise the share price and dividends yet are likely to reduce the firms judge in the lasting term. Another motive of management may be to maximise the rate of growth of the firms summations.

In the long-run, a larger asset base should allow a business to achieve higher(prenominal) profits. It can also bring management other rewards, such(prenominal) as higher salaries and prestige. Another objective a firm may have is to engage itself in economies of outstrips. Economies of scale may be described as the increase in energy of employment as the number of goods being produced increases! . Typically, a firm that achieves economies of scale lowers the average cost per unit through change magnitude production since fixed costs are shared everywhere an... If you inadequacy to get a full essay, order it on our website: OrderEssay.net

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