Question

Explain how firms creates wealth for their owners and how they benefit others in society. (please provide a detailed answer) Thank You.

Answer 1

The existence of firms and the profit maximization objectives leads to the innovation and the creation of products and services benefitting the society. The products created like television, mobile phones, etc creates the benefit to the society by creating connection amongst people. The usage of these products has led to the time saving and fast dissemination of information. The sale of these products leads to the creation of wealth for the owners of this firm.

Hence, the firms create wealth for the owners and benefit various groups of the society.