Abstract
Baumol1 has put forward the idea that a firm has as its objective the maximisation of sales revenue subject to a profit constraint. He claimed that firms give precedence to the pursuit of maximum sales revenue over the pursuit of maximum profit because managers believe that their salaries, power and standing, both within their own company and within the business community at large, are more closely related to the attainment of the former than the latter objective.
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Notes and References
Baumol, Economica (Aug 1958) and Business Behaviour, Valueand Growth.
W. G. Shepherd, Economica (Nov 1962).
C. J. Hawkins, American Economic Review (June 1970). But see also T. A. Murphy and Y-K. Ng, Journal of Industrial Economics (Mar 1974).
J. S. Chiu, A. O. Elbing and J. W. McGuire, American Economic Review (Sep 1962).
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© 1976 P. J. Curwen
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Curwen, P.J. (1976). Sales-Revenue Maximisation. In: The Theory of the Firm. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-15645-0_16
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DOI: https://doi.org/10.1007/978-1-349-15645-0_16
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