Aims of firms

Market is interplay between buyers and sellers. It is devidet in to categories: perfect competition, monopoly, monopolistic competition, opligopoly. In these structures there are from one till tausands of firms. Which all of them try to reach the best achievements in their busineses.
First of all, most of economisc state that the main goal is profit maximization. Profit is money which is gained from selling something for more than one paid for. And it is maximized when marginal cost is equal marginal revenue. So basically it is base on revenue or cost.
Graph 1.1 shows marginal cost (MC) and marginal revenue (MR) equilibrium. When MR exceeds MC it means that revenue will be bigger than cost for extra units. Total profit will increase. Wile MR is exceeding MC- profit can be increased by increasing production. When MC exceeds MR it is opposite reaction: for extra units, cost is higher and revenue is lower. Profit can be increased by cutting down the production. And it leads to profit maximisation where MR=MC.
However, not all firms maximize their profits; even they are able to do this. Public limited companies are in directors and managers hands, it means that they control all economical situations. Decision makers seek benefit for themselves- they increase salaries, rise up company prestige, making better working conditions, grater sales. They try to make share holders happy us well because they should get their dividends. This kind of behaviour is different from profit maximizing and the name of it is profit satisficing. Sometimes it becomes problematic. Shareholders expect for increasing of dividends and share value, but when it is not happening both sides can have big argument.
Secondly, the best thing for firm is when ownership and control belong to one or few persons. So there is just one side objective- sales revenue maximisation....

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