Profit maximisation and the alternatives: revenue, sales, satisficing, and the divorce of ownership from control that permits them.
Why did a company you use lose money for a decade on purpose?
The economics does not change between boards — only the reference number and the exam style. This page is written to the concept, so find your own line below and read on.
| Specification | Reference | Section |
|---|---|---|
| AQA A-Level Economics 7136 | 4.1.5.2 | The objectives of firms |
| Edexcel A Economics 9EC0 | 3.2.1 | Theme 3 |
| Pearson Edexcel IAL Economics | WEC13 · Unit 3 | Business behaviour |
Profit maximisation and the alternatives: revenue, sales, satisficing, and the divorce of ownership from control that permits them.
AQA sets this out as 4.1.5.2 — The objectives of firms, inside Perfect competition, imperfect competition and monopoly. The full spectrum of market structures, and the efficiency case for each. It is assessed on Paper 1 and Paper 3.
Topic pages on this site are not written and abandoned. Each one gets the definition and the specification framing first, then the diagram drawn properly, then how the board actually examines it, and then the five branches below — added over months rather than dumped in one go.
This page is at the first stage. If you need this topic before then, the revision platform already covers the full specification interactively, and the Intelligence Briefing carries model answers on the essays most likely to appear.
Application is worth more marks than knowledge on this specification — AO2 carries 26–29% against AO1's 20–23%. So the examples are not decoration. They are where a third of the paper lives, and the ones that earn are the ones specific enough to be checked.
Growth-first firms sacrificed profit for market share and then raised prices once the share was defended.
Satisficing explains most managerial behaviour better than maximising does.
The divorce of ownership from control is why managers and shareholders can want different things.
Each of these becomes a full piece in its own right, in the branches below. What is here is the hook; the argument, the data and the essay application are what the pieces are for.
Every question on this specification is marked against four assessment objectives, and they are not weighted equally. Most revision treats a topic as a body of knowledge; the paper treats it as four separate skills applied to that knowledge. This topic is examined as a structure and behaviour topic, so here is what each objective looks like on it specifically.
| Weight | What it is | What it means on the objectives of firms | |
|---|---|---|---|
| AO1 | 20–23% | Knowledge and understanding of terms, concepts, theories and models | Define the structure by its characteristics, not by naming a company that resembles it. |
| AO2 | 26–29% | Application of that knowledge to economic contexts | Identify which structure the market in the question actually is, and justify the classification before using it. |
| AO3 | 26–29% | Analysis of issues and their impact on economic agents | Derive the behaviour from the structure — price, output, profit, efficiency — instead of describing what firms do. |
| AO4 | 22–25% | Evaluation of arguments, using evidence to support a judgement | Set static against dynamic efficiency, and the short run against the long run. Almost every judgement about firms reduces to one of those two tensions. |
Everything above is the anchor. The pieces below take it further, and each one is built to train a particular assessment objective rather than to cover the topic again. They accumulate — nothing on this page gets deleted, it gets added to.
The revision platform covers the whole specification now, and the Academy marks your written answers against the framework examiners use. The library is the free layer, not the only one.
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