How Do Operating Costs Affect Profit?
Operating costs that are high or increasing can reduce a company's net profit. A company's management will look for ways to stabilize( stand still ) or decrease operating costs while still balancing the need to manufacture goods that meet consumer demands. If operating costs become too high, management may need to increase the price of their products in order to maintain profitability. They then risk losing customers to competitors who are able to produce similar goods at a lower price point.
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