The objective of an enterprise to produce its output at the lowest possible cost. It usually refers to the cost of providing goods or services of a specified quality; it does not mean achieving lower costs by cutting standards. Cost minimization is a necessary condition for profit maximization. It does not imply operating at the lowest point of a U-shaped cost curve, unless the market will accept the level of output which this entails. If there are large economies of scale, the desired output may well be less than the minimum point on the cost curve: what is socially desirable is producing what is wanted at minimum cost, not achieving low average cost via producing things nobody wants.