Discuss the Extent to Which Firms in the Leisure Industry Always Seek to Maximise Profits.

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Discuss the extent to which firms in the leisure industry always seek to maximise profits. Profit maximisation is achieving the highest possible profit where marginal costs are equal to marginal revenue. This is what some firms in the leisure industry will seek to do, such as cinemas, as the business' main objective is to create high levels of profit. Profit maximisation can be seen on the graph at point MC=MR (the two curves cross). This is the point where profits are maximised. However, it is not always the case that a firms main objective is maximising profit. Some firms' main priority may be to maximise growth. Growth maximisation is where the firms main objective is to increase the size of the firm as much as possible. In the leisure market, this may apply to businesses such as Clinton Cards. Clinton Cards has recently gone into administration due to falling sales caused by increasing online competition. It is likely that growth maximisation is its main objective at the moment in a bid to increase its already diminishing market share in an attempt to survive. Some other firms in the leisure market, such as , will have the objective of revenue maximisation. This is when the objective of the firm is achieving as high a total revenue as possible and occurs when marginal revenue is equal to zero, as shown on the graph. Another objective of a firm may be profit satisficing, where a firm makes a reasonable level of profit that satisfies its stakeholders without maximising profit. Examples of this in the leisure market may include businesses that have only just set up, as they perhaps do not have the work force to maximise profits yet and instead settle for a satisfying level of profit. The final objective of a business may be utility maximisation. Utility maximisation is the aim of trying to achieve as much satisfaction as possible. This may include

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