Financial Consequence for an Owner Deviating from Profit Maximization
Unlike managers, when a firm's owner makes a decision that reduces profits, the resulting financial loss directly impacts the owner's personal income. This occurs because the owner is the firm's residual claimant, meaning they are entitled to the profits that remain after all costs are paid.
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Social Science
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CORE Econ
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.6 The firm and its employees - The Economy 2.0 Microeconomics @ CORE Econ
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