What is a firm may sacrifice short-run profit to long -run growth and profitability?

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2026-03-28 18:25

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Long-run growth and profitability will, in the long-run, be far more profitable than short-term gains from risky behaviour, so if the firm expects to exist for the long-run, then it would be optimal to sacrifice short-term profits in order to achieve the higher profit in the future. Economic actors tend to optimise their decisions over not just one period of time but many.

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