2b) Discuss the Extent to Which Firms in the Leisure Industry Always Seek to Maximise Profit.

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Profit maximisation is assumed to be the objective of a firm, however there are other objectives that firms have, these include: revenue maximisation and sales maximisation. A firm aiming to maximise profit will aim to operate at output level Q, where Marginal Revenue (MR) is equal to Marginal Cost (MC). A process that companies undergo to determine the best output and price levels in order to maximize its return. The company will usually adjust influential factors such as production costs, sale prices, and output levels as a way of reaching its profit goal. There are two main profit maximization methods used, and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method. Profit maximization is a good thing for a company, but can be a bad thing for consumers if the company starts to use cheaper products or decides to raise prices. This is what some firms in the leisure industry will aim to do, for instance, Cinemas will hope to achieve the highest level of profits. Although most firms in the leisure industry aim to maximise profit, some firms have other main objectives, such as to maximise growth. Growth maximisation is where the firm’s main goal is to increase the size of the firm as much as possible. Some firms may have the objective to maximise revenue, this basically is when a firms aim is to achieve as high total revenue as possible and occurs when marginal revenue to equal to zero. Another objective of s firm may be a profit satisfaction, this is where a firm produces a profit which is deemed to be a reasonable level, which is satisfying to stake holders and is not maximising profit. The best example in a leisure market is a firm that has been recently set up and wants to survive so the first couple of years their target will be to make a profit and survive. If they try to maximise profit it would an unrealistic competition as

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