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What is a profit constraints?

Updated: 8/19/2022
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11y ago

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In economics, profit constraints basically have two categories. Non-binding and binding profit constraints. Non-binding is more likely preferred by managers who pursue an 'enough profit level' comparing with a higher chosen by owners. This finally gives rise to a bind and a non-bind curve that shows a profit of maximum total revenue level below or above the profit constrain that is determined by owners and managers respectively.

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