A Firm Plans to Use a Defensive Core Strategy of Protect

question 3

Multiple Choice

A firm plans to use a defensive core strategy of protect position,with the strategic objective of maintaining profits.Which of the following strategies is the firm most likely to implement as a part of its core strategy?

• A)build customer retention
• B)enter new related markets
• C)harvest for cash flow
• D)divest for cash flow
• E)develop new markets

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Definitions:

MR

Marginal Revenue, the additional income that is gained from selling one more unit of a good or service.

Purely Competitive Seller

A seller operating in a market where there are many buyers and sellers, no barriers to entry, and products are homogenous, leading to perfect competition.

Total Fixed Cost

The sum of all costs that do not change with the level of output, such as rent, salaries, and insurance premiums.

Short Run

A period in which at least one factor of production is fixed, limiting the ability of a business to adjust to changing market conditions fully.