Tangency as a Profit Minimum with a Highly Concave No-Shirking Wage Curve
In specific cases where the no-shirking wage curve is highly concave, the tangency point with an isoprofit curve can represent a profit minimum instead of a maximum. This situation occurs when the no-shirking wage curve is so curved that it lies below the isoprofit curve on both sides of the tangency point. By tracing the path along this no-shirking wage curve, one observes that profit decreases as it approaches the tangency point and only begins to rise after passing it, which confirms the point as a local profit minimum.
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