Book Notes for Ch. 8 ec

Book Notes Ch. 8 ? problems with traditional theory ? difficulties in maximizing profit ? non use of opportunity cost ? diffficulties in maximizing profit ? difficulties in identifying demand and MR ? difficulties in maximizing profit ? difficulties in deciding the tiem epriod for maximizing profit ? problems with traditional theory ? alternative aims ? separation of ownership and control ? alternative aims ? the principal agent problem ? asymmetric information ? overcoming the problem ? alternative aims ? managerial utility maximization ? alternative aims ? profit satisficing ? alternative aims ? survival ? attitudes towards risk ? alternative maximizing theories ? long run profit maximization ? implications for investment, short run pricing and output ? long run profit maximization ? difficulties in testing the theory ? alternative maximzing theories ? sales revenue maximization ? equilibrium output and price ? sales revenue maximization ? effect of a minmum profit constraint ? sales revenue maximization ? implications for advertising ? sales revenue maximization ? comparisons with short run profit maximizing ? sales revenue maximization ? implications for the consumer ? sales revenue maximization ? asessment of the theory ? alternative maximizing theories ? grwoth as a motive for firms ? grwoth maximization ? growth as a motive for firms ? means of acheiving growth ? alternative maximizing theories ? growth by internal expansion ? sources of funds ? growth by internal expansion ? the take over constraint ? alternative maxmizing theories ? grwoth by mergera nd take over ? types of emrger ? horizontal ? vetical ? conglomerate ? growth by mergers and take over ? merger activity ? growth by mergers and take over ? motives for mergesr ? growth ? economies of scale ? monpoly power ? for increased market valuation ? to reduce uncertainty ? other motives ? growth by mergers and taker over ? relationshp between growth and profit ? alternative maximizing theories ? difficulty in identifying equilibrium for a growth maximizing firm ? depends on strategies pursued to achieve growth ? depends on assessment of market opportunities ? growth maximizing firms tend to be more diverisifed ? alternative maximizing theories ? alternative maximizing theories and the public interest ? depends on strategies pursued ? multiple aims ? satisficing and the setting of targets ? various possible targets ? potential conflicts between targets ? multiple aims ? behavioral theories of the firms ? the nature of behavioral theoreis ? descriptive ? target confilcta nd search procedures ? organizational slack ? multiple aims ? [predictions of behavior ? conservatism ? comprison with other firms ? multiple aims ? satisficing and the public interst ? advantages ? disadvantages ? pricing in practice ? cost based pricing ? P = AC + profit mark up ? choosing the mark up ? equilibrium price and output ? the firms supply curve ? pricing in practice ? variations int he mark up ? factors affecting the size of the mark up ? factors determining a price fall ? factors determining a price rise ? cost based pricing adn objective of maximizing profit