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This is not the same as profit maximisation. Point A represents profit maximisation. Point B represents the point where sales maximisation, point Z, appears on the profit ability curve. It can be seen that profit maximisation and sales maximisation are not normally the same thing. Point A is the desired position for the shareholder and point B is the desired position for, in Baumol\u2019s theory, management. However shareholders will require dividends to stay happy with the firm\u2019s performance. In Baumol\u2019s theory there an Operative profit constraint. The operative profit restraint is the minimum amount of net profit that the shareholder will be satisfied with. If this restraint is active it may reduce the maximum sales the directors can achieve. If this operative profit constraint is active then output will be greater as a sales maximiser than a Profit maximiser. When discussing which model best reflect the reality of managerial behaviour it is necessary to examine what motivates managers and what determines there objectives.<\/p>\n","protected":false},"excerpt":{"rendered":"
Already spent a lot of time in writing your assignment but found no satisfactory result? Don\u2019t waste any more time. Approach our experts NOW! Want to write your essay from scratch? Our qualified writers can get everything done right from Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[11,13],"class_list":["post-428982","post","type-post","status-publish","format-standard","hentry","category-essay-paper-writing","tag-assignment-writing-service","tag-essay-writing"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/428982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=428982"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/428982\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=428982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=428982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=428982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}