Question

Which two time horizons of profit maximisation are considered as pricing objectives?

Options

• Short-run profit maximisation and long-run profit maximisation

• Daily profit maximisation and weekly profit maximisation

• Monthly profit maximisation and yearly profit maximisation

• Pre-launch and post-launch profit maximisation

Answer 1

Under pricing objectives, a firm may choose between short-run profit maximisation and long-run profit maximisation. The chosen horizon influences the price level, as short-run gains may require different pricing than sustained long-run profitability.