Competition from profit- maximizing firms will drive firms that are not maximizing profits out of business.

Question

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Profit-maximizing firms are more efficient and likely to produce goods and services at lower costs, which enables them to offer lower prices to consumers. In a competitive market, firms that do not maximize profits will struggle to survive as they will not be able to compete on price or quality. This ultimately leads to them going out of business or being acquired by profit-maximizing firms.

Competition from Profit- Maximizing Firms Will Drive Firms That Are