In an effort to achieve short-run profit maximization, limited resources should first be allocated to the product with

Question

Kali Mcclain

Social Studies

31 January, 16:32

In an effort to achieve short-run profit maximization, limited resources should first be allocated to the product with

+1

Answers (1)

Know the Answer?

Donte Peck · Answer 1

In an effort to achieve short-run profit maximization, limited resources should first be allocated to the product with: The highest contribution per unit of constraining factor

Constraining factor is everything that limit the potential sales of the product (in this case it would be the limited resource.)

By increasing contribution per unit of the constraining factor, we put the production and distribution process of the product into a maximum efficiency, which will lead to short-run profit maximization