Microeconomic theory assumes that all firms maximize profits because

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    it has been observed that managers always align their goals with investors and seek to maximize short and long run profits.
     profit is likely to dominate almost all decisions for smaller firms.
     if managers deviate from profit maximization decisions for too long shareholders or the board of directors will replace them.
     Both 2 and 3.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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Both 2 and 3.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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