To Overcome Price Escalation When Selling to Less-Affluent Consumers in Developing

question 15

True/False

To overcome price escalation when selling to less-affluent consumers in developing countries, companies make simpler or smaller versions of their products that can be sold at lower prices.

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Definitions:

Economies of Scale

Cost benefits that companies achieve because of their large scale of operations, generally resulting in a lower cost per output unit as the scale increases.

Per-Unit Costs

The average cost for each individual unit of product produced, taking into account all fixed and variable expenses.

Marginal Costs

The incremental cost involved in producing one more unit of a product or service.

Learning Curve

The concept that people improve efficiency and decrease cost over time as they gain experience in a particular task or operation.