Part 1A firm might not seek to maximize profit if instead its primary goal is to Part 2
A. be a sole proprietorship. B. not be driven out of business. C. achieve technological efficiency. D. produce output with the fewest inputs. E. have fancy offices.

Question

BlackTom AI · Accepted Answer

The question asks about a firm’s possible primary goal other than maximizing profit in Part 1A. Here are the options analyzed one by one to understand why the listed goal might take precedence over profit maximization.
Option A: 'be a sole proprietorship.' This choice describes a legal or organizational form rather than a behavioral or strategic goal. While being a sole proprietorship can relate to entrepreneurial style, it does not logically explain a firm’s motive to forgo profit maximization in favor of another objective. Therefore, this option misidentifies the intended primary goal of the firm, making it an unlikely reason to deprioritize profits.
Option B: 'not be driven out of business.' This reflects a survival objective. In the short run a firm may sacrifice some profit to ensure survival against competition, economic downturns, or cash-flow constraints. Emphasizing long-run viability can justify not pursuing maximum profits if such pursuit threatens liquidity or solvency. In many theories of the firm, survival and staying in business is a fundamental priority, so this option presents a plausible primary goal.
Option C: 'achieve technological efficiency.' While technological efficiency can enhance profitability, it is typically a means to an end rather than the overarching objective itself. A firm might pursue efficiency to improve competitiveness, but it’s not inherently a motive that overrides profit maximization as a primary goal unless the survival or strategic posturing requires it. As a stand-alone objective, it doesn’t directly explain forgoing profits as a core aim.
Option D: 'produce output with the fewest inputs.' This is a production-efficiency goal that focuses on minimizing inputs for a given output. Like option C, it improves efficiency and can lower costs, but it is not in itself a primary reason to abandon profit-maximizing aims. It describes a method rather than a fundamental objective that would supersede profits.
Option E: 'have fancy offices.' This describes a cosmetic or status-oriented objective, not a strategic economic goal tied to survival or long-run viability. It’s generally considered a misallocation of resources if profits are being maximized, and thus unlikely to be the firm’s primary objective.
In summary, among the options, only option B directly ties a strategic priority—survival or staying in business—to a reason for not maximizing current profits. The other choices describe organizational form, or efficiency-oriented aims, or superficialities, which do not inherently justify sacrificing profit-maximization as a fundamental goal. Thus, option B presents the most coherent rationale for a firm to deprioritize profit maximization in favor of a survival objective.

Homework:HW5

Part 1A firm might not seek to maximize profit if instead its primary goal is to Part 2 A. be a sole proprietorship. B. not be driven out of business. C. achieve technological efficiency. D. produce output with the fewest inputs. E. have fancy offices.

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