If a Customer Perceives That an Established Firm's Products Meet

question 58

Multiple Choice

If a customer perceives that an established firm's products meet his/her needs in a unique way, the firm has succeeded in establishing

• A) economies of scale
• B) differentiation
• C) switching costs
• D) capital requirements

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Definitions:

Dominant Strategy

A strategy in game theory that is the best action for a player irrespective of what the opponent does.

Tit-For-Tat

A strategy in game theory where a participant replicates the opponent's previous action, as in a retaliatory or cooperative manner.

Repeated Game

A game-theory concept involving the same game played multiple times, where outcomes can be affected by previous games.

Cournot Model

An economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide upon independently and at the same time.