A fiRm That Wants to Offset the Risk Associated with Operating

question 66

Multiple Choice

A firm that wants to offset the risk associated with operating in a single product line would:

• A) acquire another firm that operates in the same stage of the production process.
• B) undertake a diversification growth strategy.
• C) increase the number of stages in its value chain.
• D) merge with firms that are at consecutive stages of the vertical chain.

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Definitions:

Bulk Pricing

A strategy where goods are sold at a reduced price per unit when purchased in large quantities, encouraging larger purchases by consumers or businesses.

Children's Meals

Specially designed and portioned meals for children, often featuring nutritional considerations and appealing presentations.

Demand Curve

A graph showing the relationship between the quantity of a good consumers are willing to buy and its price.

Marginal Cost

The cost incurred by producing one additional unit of the product.