Akamai Technologies Is a Dominant Player in the Content Delivery

question 5

Multiple Choice

Akamai Technologies is a dominant player in the content delivery network (CDN) market.Akamai is not very diversified (i.e., is dependent on the CDN market) .If rival CDN providers such as Limelight Networks and Level 3 Communications lower their basic CDN service prices, which of the following would Akamai likely do?

• A) Raise its prices
• B) Do nothing since it is the market leader
• C) Exit the industry
• D) Lower its prices

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Definitions:

Master Budget

A comprehensive financial planning document that consolidates all of a company's budgets for sales, production, direct materials, direct labor, overhead, administrative, and other expenses.

Direct Labor

Wages and salaries for employees who are directly involved in producing goods or providing services.

Cost of Tracie's Direct Labor

The total expense associated with the work performed by Tracie directly involved in producing goods or services.

Variable Overhead Rate

This rate reflects the cost of variable overhead allocated to each unit of production, based on an activity such as direct labor hours.