'A firm should be encouraged to maximise profits beacuse this makes it efficient.' Discuss whether this argument is trye for a firm operating in an imperfect market.
Answers (1)
The question is clumsy. A corporation (the only kind of firm that is required to publish a printed purpose) declares that it exists to earn a "fair" return on investment, not to maximize profits. A firm's behavior does not "make it efficient"; efficiency is the ratio of achievement to effort. The only answer to such a statement is "What are you talking about?"