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SALES MAXIMIZATION AND PROFIT MAXIMIZATION: A NOTE ON THE DECISION OF A SALES MAXIMIZER TO THE INCREASE OF PER UNIT COST
Author(s) -
Li Ke,
Yao Shuntian
Publication year - 2007
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2007.00371.x
Subject(s) - economics , mistake , profit maximization , profit (economics) , revenue , maximization , microeconomics , unit (ring theory) , utility maximization , econometrics , mathematical economics , mathematics , finance , mathematics education , political science , law
. In this paper, the authors compare the behaviours of a sales revenue maximizer with that of a profit maximizer in their response to an increase of the per unit production cost or a per unit tax being imposed. A common mistake in currently used textbooks is pointed out, and a new proposition is proposed for replacing a false statement there.