Q:

What is profit maximization?

A:

Profit maximization is the course of action a business takes to make the highest return from the goods or services they offer. One major way businesses achieve profit maximization is through reduction of production costs.

According to Investor Words, businesses also maximize profit by adjusting the price of products and services or by adjusting production levels. Making the most money possible is a positive for the business, but consumers sometimes suffer as prices rise or as quality decreases. The ideal situation for both parties is for the business to maintain quality at a reasonable cost while still making a healthy profit.


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