Do profit maximizers take cold showers?
Article comments
Neil A. Campbell and Jeffrey J. Kline (2001) Do profit maximizers take cold showers?
School of Business Working Paper ; No. 1, Mar. 2001
© Copyright Neil A. Campbell, Jeffrey J. Kline and the School of Business, Bond University
Abstract
A firm takes a "cold shower" if removal of a protective subsidy induces investment in a cost-reducing technology. We show that if the investment lowers marginal cost everywhere, then profit maximizers never take cold showers. However, if the investment does not lower marginal cost everywhere, a profit maximizer may take a cold shower.
Suggested Citation
Neil Campbell and Jeffrey J. Kline. 2001. "Do profit maximizers take cold showers?" Business papers
Available at: http://works.bepress.com/neil_campbell/1