2. Alternative Objectives for Firms Normal Profit Only Costs
& RevenueMCACARMRNormal Profit where AR = ACOutput 3.
Alternative Objective: Revenue Maximisation Costs &
RevenueRevenue Max: MR=0 MCACARProfit Max: MC=MRMROutput 4.
Alternative Objective: Revenue Maximisation Costs &
RevenueRevenue Max: MR=0 MCP1 ACARProfit Max: MC=MRMROutput 5.
Alternative Objective: Revenue Maximisation Costs &
RevenueRevenue Max: MR=0 MCP1 ACC1 ARProfit Max: MC=MRMROutput 6.
Alternative Objective: Revenue Maximisation Cost &
RevenueRevenue Max: MR=0 MCP1 ACC1 ARProfit Max: MC=MRMROutput 7.
Motivations for Revenue Maximisation rather than Profit Max
Protecting Market PositionBusiness survivalManagerial
ObjectivesBreaking into a new Market 8. What is Satisficing? Why do
many businesses satisfice? Price and CostMCACARProfit Max:
MC=MRMROutput 9. What is Satisficing? Why do many businesses
satisfice? Price and CostMCP1 ACARProfit Max: MC=MRQ1MROutput 10.
What is Satisficing? Why do many businesses satisfice? Price and
CostPossible satisficing price MCP1 AC P2ARQ1Q2 MROutput 11. What
is Satisficing? Why do many businesses satisfice? Price and
CostPossible satisficing price MCP1 AC P2C2 ARQ1Q2 MROutput 12.
What is Satisficing? Why do many businesses satisfice? Price and
CostPossible satisficing price MCP1 AC P2C2 ARQ1Q2 MROutput 13.
Evaluating the Importance of Profit Stagecoach Group PlcLargest UK
bus operator by revenue and fleetThe Group has around 20% of the UK
Bus market excluding London, it has 14% of the London bus transport
marketOne of the UKs biggest train operators, including 49% stake
in Virgin TrainsAnnual revenues of 2.8bn, carrying around 2.5
million passengers daily in the UKMain rivals are Go-Ahead Group,
First Group and National Express 14. Evaluating the Importance of
Profit Stagecoach PlcWhy are profits important for a business such
as Stagecoach plc?1 It generates finance for investment in new
capital 2 Creates finance for advertising and expansion 3 It
attracts new investors into the business4 It creates rewards for
employees and shareholders 15. Factors Affecting Profitability of
Stagecoach plc Internal Cost / Revenue factorsCost of FuelCost of
labourInternal to the businessProductivityCost of capital 16.
Factors Affecting Profitability of Stagecoach plc Internal Cost /
Revenue factorsExternal Cost / Revenue factorsCost of FuelDemand
for coach/bus travelCost of labourInternal to the
businessProductivityCost of capitalSubstitutes availableExternal
factorsLegal CostsCompetitor Actions 17. Get help from fellow
students, teachers and tutor2u on Twitter:#econ3@tutor2u_econ
