Which of the Following Is an Advantage of Cost Leadership

question 46

Multiple Choice

Which of the following is an advantage of cost leadership?

• A) It makes a firm following this strategy well positioned to withstand price competition from rivals.
• B) The need for high sales volume requires low upfront investments in production and/or distribution capacity.
• C) In markets that involve a lot of brand loyalty, cost leadership companies command the largest share in the market.
• D) Low expenditure on market research helps firms following the cost leadership strategy to detect important environmental changes at a lower cost.
• E) Highly fragmented markets offer firms following this strategy greater opportunities to attract a large segment of customers.

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Definitions:

Price Of Food

The financial cost or value assigned to food items, influenced by factors such as production costs, supply, and demand.

Guineas

A British gold coin that was issued from 1663 until 1814, traditionally valued at 21 shillings.

Lemons

A term that can refer to a type of citrus fruit or, in economics, a product that is found to have defects after it has been bought.

Tangerines

A small citrus fruit with a deep orange color, known for its sweet flavor and easy-to-peel skin.