Scenario 8.1: Two Soft-Drink Firms, Fizzle & Sizzle, Operate on a River

question 25

Multiple Choice

Scenario 8.1:
Two soft-drink firms, Fizzle & Sizzle, operate on a river. Fizzle is farther upstream, and gets cleaner water, so its cost of purifying water for use in the soft drinks is lower than Sizzle's by $500,000 yearly.
-According to Scenario 8.1, Fizzle and Sizzle:

• A) would be perfectly competitive if their purification costs were equal; otherwise, not.
• B) would be perfectly competitive if it costs Fizzle $500,000 yearly to keep that land.
• C) may or may not be perfect competitors, but their position on the river has nothing to do with it.
• D) cannot be perfect competitors because they are not identical firms.

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Definitions:

Cannibalize

In business, refers to a situation where a company's new product or service takes away sales from its existing offerings.

Highly Innovative

Refers to organizations or individuals that exhibit a strong capacity for creativity, leading to groundbreaking ideas and products.

Mission Statements

Formal summaries of the aims and values of a company, organization, or individual, guiding its decision-making and path forward.

Organizational Goals

The objectives or desired outcomes that an organization aims to achieve over a specific period, guiding its strategic decisions and actions.