Which of the Following Is a Risk a Company Takes

question 146

Multiple Choice

Which of the following is a risk a company takes when building a strategy around the experience curve?

• A)Aggressive pricing may give the product a cheap image,causing customers to lose interest.
• B)The method may cause consumers to become frustrated with changing prices.
• C)Competitors will likely not be able to meet the company's price cuts.
• D)Existing technologies are likely to become more expensive as the company expands.
• E)The method does not take competitors' prices into account.

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Definitions:

Insider

An individual with access to confidential or non-public information about a company, often used in the context of insider trading.

Securities and Exchange Act

A U.S. law enacted in 1934 that governs the securities industry, aiming to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

Directors

Persons chosen by the corporation's shareholders to supervise management and make important strategic choices for the company.

Due Diligence Defense

A legal defense used in securities law, asserting that all required investigations and disclosures were made appropriately.