profit minimization
[ˈprɑːfɪt ˌmɪnɪmaɪˈzeɪʃən]
noun
minimização de lucros
1. A business strategy or economic condition where a company deliberately reduces or limits its profits, often through pricing decisions, cost structures, or operational choices
The utility company engaged in profit minimization by keeping rates low to avoid regulatory scrutiny.
A empresa de utilidade pública praticou minimização de lucros mantendo as tarifas baixas para evitar escrutínio regulatório.
2. An economic model where firms set prices and output levels to achieve the lowest acceptable profit margin rather than maximum profit
Under profit minimization theory, regulated monopolies may aim for just enough earnings to cover costs and provide reasonable returns.
Sob a teoria de minimização de lucros, monopólios regulados podem visar apenas lucros suficientes para cobrir custos e fornecer retornos razoáveis.
3. A deliberate business approach to maintain market share, avoid excessive profits that might invite competition or regulatory intervention
The pharmaceutical company considered profit minimization on generic drugs to maintain its market position.
A empresa farmacêutica considerou a minimização de lucros em medicamentos genéricos para manter sua posição no mercado.
This term is primarily used in academic and regulatory contexts in both Brazil and the USA. In Brazil, it's particularly relevant when discussing utility companies and regulated industries. In the USA, the concept gained prominence in discussions of utility regulation and was popularized by economist William Baumol's theories. The concept reflects the balance between business profitability and regulatory or market pressures.
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