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How Could the Assumption of Profit Maximization Be Justified

Question 20

Multiple Choice

How could the assumption of profit maximization be justified?


A) The managers of a commercial firm who do not seek profit maximisation are more likely to lose their jobs, so only profit maximisers will survive.
B) Business scandals such as those that took place at Enron and Ahold prove the wrongness of this assumption; therefore nobody should try to justify it
C) It cannot be justified and is only an easy and common way to overcoming the difficulty to define the ultimate goal of the firm
D) It does not need to be justified because it is a basic assumption of business.

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