Q:

What is profit maximization?

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Quick Answer

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.

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Full Answer

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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