All firms maximize profits? true or false?

False. Some firms exists simply for tax purposes, creating postive cash flow but a net loss to create a tax deduction. Others exist solely as a legal entity for the benefit of another (parent company).All firms maximize profits? true or false?
False... some maximize profit only to the extend they obtain benfit after taxes... some firms are kept at a loss in order to mitigate profit in other areas....All firms maximize profits? true or false?
yes, unless they're a non-profit organization.
False, often firms pursue policies that don't maximize profits but that have other benefits. An example might be philanthropy. The money donated doesn't generate a return but satisfies other needs such as making employees feel they work for an honorable organization.





Maybe a better example is when an individual is approached on the street by a panhandler. The profit maximizing course would be to not give a hand out. But people do. Why? Because the ';value'; derived from making the donation outweighs the cost. People at work sometimes behave in the same way.





Also, some firms will forgo profit opportunities if there is sufficient risk.