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Thursday, February 12, 2009

Profit Maximization and the Bottom Line

The behavior of profit maximization as it relates to the bottom line will result in one of two outcomes. If the bottom line of the company shows a profit, it will be the most profit the company can receive for using its resources efficiently. If the bottom line of the company shows a loss, it will be the minimum loss the, company can incur by using its resources efficiently.

The only thing the behavior of profit maximization will ever guarantee is the efficient use of scarce resources. When resources are allocated efficiently, we all have more of the things we want.

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