Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as __________, is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.
A)maximizing current profit
B)target return
C)break-even strategy
D)minimizing risk
E)managing for long-run profits

Question

Quizplus · Accepted Answer

The objective described in the question is known as a market penetration strategy, which falls under the objective of managing for long-run profits. This strategy involves sacrificing short-term profit to increase market share and gain a competitive advantage, with the goal of leveraging that advantage to achieve higher profits in the long run. Therefore, the best choice is E - managing for long-run profits.

Three Different Objectives Relate to a Firm's Profit, Which Is