When Faced with a Competitor Who Has Cut Its Product's

question 19

Multiple Choice

When faced with a competitor who has cut its product's price,which of the following is typically the most cost- effective way for a company to maintain its own price but raise the perceived value of its offer?

• A)distributing the product through less costly channels
• B)bundling the offer with add- ons
• C)improving the quality of the product
• D)introducing a higher- priced premium brand
• E)altering the company's marketing communications

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Definitions:

Total Cost

The sum of fixed and variable costs incurred in the production of goods or services.

Isocost Line

A graphical representation in economics that shows all possible combinations of inputs that cost the same total amount.

Slope

A measure of the steepness or incline of a line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Prices of Capital

Prices of capital refer to the cost of acquiring, maintaining, and using productive assets such as buildings, machinery, and equipment for producing goods or services.