Which of the Following Firms Is Most Likely to Realize

question 74

Multiple Choice

Which of the following firms is most likely to realize a competitive advantage through product/service differentiation?

• A) A firm that sells its products at lower costs than its competitors
• B) A firm that inhibits post-sale customer service relations
• C) A firm that provides highly reliable products
• D) A firm that solely relies on promotional strategies to increase its sales

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Definitions:

Average Total Cost

The average cost per unit of output, calculated by dividing the total production cost by the quantity of goods produced.

Fixed Cost

Expenses that do not change with the level of production or sales over a certain period, such as rent or salaries.

Output

The amount of goods or services produced by a person, machine, or industry.

Marginal Product

Marginal product refers to the additional output generated by employing one more unit of a specific factor of production, holding all other factors constant.