Profit maximization depends upon demand conditions, as well as upon productivity and costs.

Question

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Demand conditions play a crucial role in determining the price that a company can charge for its products and hence affects the revenue and profit. At the same time, productivity and costs impact the cost structure of the business, which also affects profit. Therefore, profit maximization depends on both demand conditions and productivity/costs.

Profit Maximization Depends Upon Demand Conditions, as Well as Upon