Q.State any three objectives a firm may pursue while fixing the price of its product.

A firm's price is set with a specific goal in mind, and that goal can differ from firm to firm or even change over the product's life.

A firm's price is not fixed arbitrarily — it is fixed to serve a chosen objective. Common pricing objectives include:

1. Profit maximisation — setting price to earn the highest possible profit given costs and demand.
2. Target return on investment — pricing to achieve a specific, planned rate of return on the capital invested in the product.
3. Gaining or defending market share — pricing (sometimes even below the level that maximises short-term profit) to win a larger share of the market or protect an existing share from competitors. …

Assuming price is always set purely to maximise immediate profit — a firm may rationally accept a lower price (or even a loss) in the short run to pursue market share or si …