Prioritizing features is specific to each company but in general it is done in consideration of customer's needs or by the willingness of a client to pay for the feature, or with an eye to competitors feature sets, or the need to grow the feature set to attract and retain customers.
You balance what the business needs are against the amount of time they require and determine which features are the most likely to be completed and add any 2-for-1 features where adding one thing will also cure another.
In a worst case you have to prioritize a fix for something that is costing too much to support, or is truly broken or causes damage to data such as corruption.
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