School Rejects Free Newspapers

[Francesca R]

No offense, but the actual purpose of anything produced to be sold is to make a profit - and that extends to news services of any type. That is not , of necessity, a preference but it is a requirement for such to continue its' existence.

But that's not the purpose of anything being bought—and there are two parties (at least) in each transaction. The utility of the good being purchased is not financial gain, but must be worth more than the financial cost of the item for the transaction to take place voluntarily. I fully agree—of course—with your statement that profit-maximisation is the driver of business owners.

Public companies are not there to maximise profit. They only must make enough profit to keep the shareholders happy.

Actually I'm going to disagree. Or rather—I'm going to say that the shareholders are objectively only happy with "maximum" return.

They can also try to increase the share price.

This is part of the shareholders' profit.

Or keep more people employed. Or may the directors more money.

Neither of these takes priority over earning returns for the shareholders. If either of these is in conflict with maximising shareholder return then they are illegitimate practices for corporations to engage in. Share prices often rise—for example—when cost reduction initiatives involving layoffs are announced.

 

[rjh01]

How would shareholders know when they have maximum profit?

 

[Francesca R]

At that point nobody would want to hold the shares any more.