We consider actions of reductive groups on a variety with finitely generated Cox ring, e.g., the classical case of a diagonal action on a product of projective spaces. Given such an action, we construct via combinatorial data in the Cox ring all maximal open subsets such that the quotient is quasiprojective or embeddable into a toric variety. As applications, we obtain an explicit description of the chamber structure of the linearized ample cone and several Gelfand�MacPherson type correspondences relating quotients by reductive groups to quotients by torus actions. Moreover, our approach provides a general access to the geometry of many of the resulting quotient spaces.
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