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Mention what is desired capability? How is it useful in terms of Selenium?

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The desired capability is a series of key/value pairs that stores the browser properties like browser name, browser version, the path of the browser driver in the system, etc. to determine the behavior of the browser at run time.

For Selenium,

It can be used to configure the driver instance of Selenium WebDriver.

When you want to run the test cases on a different browser with different operating systems and versions.