If the socially responsible business practices are costly, firms should not perform them.

Question

Quizplus · Accepted Answer

While socially responsible business practices may involve some additional costs, they often result in long-term benefits such as improved reputation, customer loyalty, and employee satisfaction, leading to higher profits in the long run. Additionally, many governments incentivize and/or require certain socially responsible practices, making them necessary for compliance and avoiding legal penalties. Therefore, firms should prioritize and invest in socially responsible practices rather than solely focusing on short-term financial gains.

If the Socially Responsible Business Practices Are Costly, Firms Should