Sales maximization may be a goal of a firm if
A)firms are managed by irrational persons.
B)the firm has no way to measure profitability.
C)the firm is privately held, and there is no separation between ownership and control.
D)managerial bonuses are based on sales revenue instead of profitability.

Question

Quizplus · Accepted Answer

If the firm's managerial bonuses are based on sales revenue rather than profitability, the managers may prioritize increasing sales even if it does not result in higher profits. This can result in sales maximization becoming a goal of the firm.

Sales Maximization May Be a Goal of a Firm If