Question

QNO4 Is short-run revenue maximization necessarily inconsistent with the more traditional long-run profit-maximizing model of firm behavior? Why or why not?

What is the main difficulty associated with making decisions solely on the basis of comparisons

Answer 1

Yes, the short-run revenue maximization is necessarily inconsistent with the more traditional long-run profit-maximizing model of firm behavior. Short term goals should be more about building a solid foundation and less about profit maximisation.
The main difficulty associated with making decisions solely on the basis of comparisons is meeting those expected returns. The best case scenario is that you meet those returns. It is impossible because of the inherent friction in the system.