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If a product is still profitable, why discontinue it?

Perhaps they would save more by discontinuing the line than they make in profits on it.

I'm not exactly sure what you mean by this. Any profit, however small, will exceed any savings you get.

I guess maybe we have different assumptions about what "profit" means. I'm assuming that when someone refers to a line of products as profitable, they are taking into account all administrative costs as well.

The factory could be used to make other even more profitable widgets. The guy who writes hardware drivers for it could be writing drivers for some other next big thing. If you're offered the choice between a penny and a dollar, you choose the dollar, even if the penny is "all profit".

Youre talking about opportunity cost. Most definitions of profit account for opportunity cost. So that penny in all profit takes into account the dollar you are forgoing.

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