Economic theory assumes our decisions are often based on the anticipated results. If we’re able to maximize an outcome, we choose the maximizing option.
As consumers, we maximize utility, making purchasing decisions based on the greatest value for the lowest cost. The same is true for productivity, searching for the greatest possible output for the least amount of input. And as small business owners, we try to maximize profit where revenue at least equals costs.
In other words, we’re simple “maximizers.” But are we really?
The reason we make one choice over the next is rarely that simple, which then begs the question of whether small business owners really maximize profits — or if this should even be the ultimate goal.…Continue reading