Abstract
W. J. Baumol suggested sales revenue maximisation as an alternative goal to profit maximisation.1 He presented two basic models: the first is a static single-period model, the second is a multi-period dynamic model of growth of sales revenue maximisation. Each model has two versions, one without and one with advertising activities. We will first present these models, examine the predictions of Baumol’s theory in various situations, and then discuss the empirical evidence from research directed to the verification of the sales maximisation hypothesis. Finally, we state some criticisms of Baumol’s theory.
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Baumol’s Theory of Sales Revenue Maximisation
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© 1979 A. Koutsoyiannis
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Koutsoyiannis, A. (1979). Baumol’s Theory of Sales Revenue Maximisation. In: Modern Microeconomics. Palgrave, London. https://doi.org/10.1007/978-1-349-16077-8_15
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DOI: https://doi.org/10.1007/978-1-349-16077-8_15
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-25349-6
Online ISBN: 978-1-349-16077-8
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