Question

When analyzing decisions that are made within a firm, economists typically assume that "profit maximization" is the firm's main goal. However, a number of other goals are also possible. Choose one of the "other" possible goals and compare it to "profit maximization." under what circumstances might the "other" goal that you described become a major focus for the firm? If you were the ceo of a large firm, what steps might you take to ensure that departments within the firm are working together toward common goals?

Answer 1

Explanation:

According to the kinked‐demand theory, each firm will face two market demand curves for its product. If the oligopolist increases its price above the equilibrium price P, it is assumed that the other oligopolists in the market will not follow with price increases of their own.

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