Consider the Following Statements When Answering This Question

question 21

Multiple Choice

Consider the following statements when answering this question. I. With convex isoquants, a firm's expansion path cannot be negatively sloped.
II) If a firm uses only two factors of production, one of whose marginal product becomes negative when its use exceeds a certain level, then a cost-minimizing firm's expansion path will have vertical or horizontal segments.

• A) I is true, and II is false.
• B) I is false, and II is true.
• C) Both I and II are true.
• D) Both I and II are false.

Understand the concept of market development and its execution strategies.

Learn how firms can mitigate risks associated with growth strategies.

Analyze customer retention versus acquisition in the context of growth strategies.

Distinguish between the Ansoff matrix and other strategic planning models.

---

Definitions:

Risk-free Rate

The theoretical return on investment with no risk of financial loss, often represented by the yield of government bonds like U.S. Treasury bills.

Expected Market Rate

The anticipated rate of return that investors predict to receive from the market as a whole over a specific period.

Myopic Behavior

Short-sighted decision-making focusing on immediate benefits rather than considering long-term consequences, often seen in investment choices.

Mean-variance Optimizers

A mathematical process used in finance to construct an investment portfolio that aims to maximize returns for a given level of risk.