Competitors Are Most Likely to React to a Price Change

question 59

Multiple Choice

Competitors are most likely to react to a price change when ________.

• A) the firm has a weak value proposition
• B) the firm enjoys a monopoly
• C) there are few competing firms
• D) the product is heterogeneous
• E) buyers have limited information

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Definitions:

Direct Materials

Raw materials that can be directly traced to and are integral to the finished product.

Raw Materials

Basic substances in their natural, modified, or semi-processed states used as inputs for production.

Predetermined Overhead

An estimated rate used to assign overhead costs to products or services based on a planned amount of overhead and a planned allocation base.

Direct Labor

Workers who are directly involved in the manufacturing of goods or provision of services, whose labor costs are directly attributed to the product or service.