chapter  2
Business Goals and Behaviour
Pages 34

In this chapter we look at a question that underlies much of the discussion in other chapters of the book, namely, the question of a firm’s aims or objectives. The traditional theory of the firm assumes that firms aim simply to maximise profits, and on the basis of this assumption a large number of testable predictions about how profit-maximising firms will behave, and the resultant performance of the industry, can be derived.