Sizes and types of firms

Assess the view that the main objective of firms is to maximise profits.

A large company experiences a significant fall in its year-end profits. Reports suggest it is a consequence of the divorce of ownership from control within the company.

Which one of the following is most likely to explain why the divorce of ownership from control may have harmed the firm’s performance?

Which one of the following is the most likely result of a divorce of ownership from control in an organisation?

Discuss how the divorce of ownership from control may affect both the conduct and performance of firms.

OR

Essay 3

‘Each time the Government imposes a minimum price or wage, the result is almost always excess supply. What matters is the extent to which this is a problem.’

Evaluate the view that a firm making low profits must be inefficiently managed.