The assumption that firms attempt to maximize profits will yield good predictions even if firms sometimes pursue other goals.

Question

Quizplus · Accepted Answer

While firms may pursue other goals, such as market share or social responsibility, the assumption that they attempt to maximize profits is still a useful predictor of their behavior. This is because profit maximization remains a dominant goal for many firms and is often a driving force in their decision-making processes.

The Assumption That Firms Attempt to Maximize Profits Will Yield