For a firm to maximize its profitability,it is necessary that it

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Picking a position on the efficiency frontier that is viable allows the firm to minimize costs while maximizing value to the customer. This leads to higher profitability as the firm is able to offer products at competitive prices while maintaining quality. Creating products similar to competitors or stripping all the value out of the product offering may lead to lower profitability due to lack of differentiation or customer loyalty. Not configuring internal operations to reduce costs or minimizing consumer surplus may lead to lower profits as well.

For a Firm to Maximize Its Profitability,it Is Necessary That