The Only Way to Exploit Successful Differentiation Is to Keep

question 44

True/False

The only way to exploit successful differentiation is to keep prices the same or only increase them moderately, leading to increased demand, economies of scale and lower costs which results in higher profitability and profit growth.

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Definitions:

FIFO

First-In, First-Out, an inventory valuation method where the oldest items are sold first.

Ending Inventory

The value of goods available for sale at the end of an accounting period which is not yet sold.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in inventory management.

Days' Sales

A metric that calculates the average time it takes for a company to convert its inventory into sales.