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EconomicsEconomicsGoals of firms = Profit Maximization, Maximization of the Shareholders WealthProfit theories = Frictional – Abnormal profits observed following unanticipated changes in demand or cost conditions.Monopoly – Above-normal profits caused by barriers to entry that limit competitionInnovation – Above-normal profits that follow successful invention or modernizationCompensatory – Above-normal rates ot return that reward efficiencyValue Maximization.