Which of the Following Does Not Represent a Strategic Behaviour

question 51

Multiple Choice

Which of the following does not represent a strategic behaviour?

• A)Build a factory with higher than needed capacity to deter possible entrants.
• B)Spend heavily on advertising to signal a quality product.
• C)Price below marginal cost to drive competitors out of business.
• D)Choose output so that marginal revenue equal marginal cost.

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Definitions:

Raw Materials

Raw materials are the basic, unprocessed materials used as inputs in the manufacturing process to produce finished goods.

Work in Process

Goods that are in production but have not yet completed the manufacturing process, considered a type of inventory on the balance sheet.

Finished Goods

A rephrased definition: Products that have completed the manufacturing process and are ready to be sold but are still in the company's inventory.

Raw Materials Inventory

The stock of materials before they are processed or used in the production of goods, part of a company's inventory of goods.