Which of the Following Companies Is Using a Divesting Strategy

question 65

Multiple Choice

Which of the following companies is using a divesting strategy?

• A) Juggernaut Bikes acquires new businesses in order to increase its market share.
• B) To achieve a higher market share, LBD Inc. increases investments in advertising and promotion.
• C) When sales of its clothing division decline, Blackstone sells the division to a competitor.
• D) Getix Computers increases the price of its products in order to maximize short-term profits.
• E) Harlow's market share remains steady over two years, and the firm decides to maintain its share at the current level.

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Definitions:

Long Run

A period in economics where all factors of production and costs are variable, allowing companies to adjust to new conditions.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total quantity produced, indicating the cost per unit of product.

Marginal Revenue

The additional income received from selling one more unit of a good or service.

Industry Supply Curve

A graphical representation showing the total quantity of a good or service that producers in an industry are willing and able to supply at different price levels.