Reference no: EM132943120

a. Read the sentences below and decide the function of each sentence by specifying which states a claim and which states a support. Fill your answers in the blank boxes.

Sentence

Function

1. It is often assumed that firms are simply concerned to maximize profits: that they are not concerned with broader issues of social responsibility.

2. It is then argued, however, that competitive forces could result in society benefiting from the self-interested behaviors of firms: i.e. that profit maximization will lead to social efficiency under conditions of perfect competition and the absence of cost.

3. But, as we have seen, in the real world, markets are not perfect and there is often cost.

4. Many forms of market failure can be attributed directly to business practices that could not be classified as 'socially responsible': advertising campaigns that seek to misinform or in some way deceive the consumer; monopoly producers exploiting their monopoly positions through charging excessively high prices; the conscious decision to ignore water and air pollution limits; knowing that the chances of being caught are slim.